Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TRADE AND INDUSTRY

Flexible Manufacturing Systems

Mr. Geoffrey Robinson: asked the Secretary of State for Trade and Industry what funds remain unspent to date in his Department's flexible manufacturing systems scheme.

The Minister for Information Technology (Mr. Kenneth Baker): Of the initial allocation of £35 million some £8 million remains uncommitted. My right hon. Friend the Secretary of State for Trade and Industry announced last week, subject to clearance from the European Commission, a further £20 million for advanced manufacturing technology.

Mr. Robinson: I am grateful to the Minister for that reply. Although the figures are welcome, they are still relatively small compared to what needs to be spent to make British industry fully modernised and competitive. Therefore, will the Minister have another word with the Secretary of State and the Minister of State to see that the modernisation schemes are not excluded from the Cooperative Development Agency and Industrial Development Bill which we shall shortly be debating on Report, because the exclusion of those schemes from eligibility for regional aid will have a further, very damaging, impact on the type of modernisation which we know the Minister is most interested in promoting?

Mr. Baker: I shall consider the latter point. As to the amount, I emphasise that one has to multiply these figures by about four to get the value of the true investment. I do not agree that these are fairly small sums. They represent a substantial investment in advanced manufacturing technology, which is, after all, where Britain has to compete.

Footwear Industry

Mr. Pike: asked the Secretary of State for Trade and Industry what are the Government's plans and strategy for the British footwear industry.

The Minister of State, Department of Trade and Industry(Mr. Norman Lamont): The Government recognise the difficulties which the footwear industry has experienced in recent years and the need to invest in advanced technological equipment. Accordingly, this industry is included in the new measures of assistance which my right hon. Friend announced on 19 March.

Mr. Pike: I thank the Minister for that reply. As he recognises the importance of the industry for employment in areas such as Lancashire, will he assure the House that he also recognises that, compared with our partners in Europe, we have the lowest percentage of exports of footwear? Will he ensure that we have not only free, but fair, trade, and will he take steps to ensure that tariff barriers in the far east are on a reciprocol basis and far fairer to British industry than they are at present?

Mr. Lamont: We are always talking to other countries about their import restrictions on shoes. The hon. Gentleman will know, because he is interested in the industry, that roughly half our imports from low-cost sources are subject to import restrictions of one kind or another. As to his point about exports, he will have noticed the good news that exports of shoes generally increased by 7 per cent. last year, and by 11 per cent. to the EEC.

Mr. Michael Morris: Is my hon. Friend aware that the announcement of £20 million for the grant scheme, along with help for design, on top of the announcement by my right hon. Friend the Chancellor of the Exchequer that VAT is to be imposed on shoe imports, is the best news that the industry has had for 10 years?

Mr. Lamont: I am grateful to my hon. Friend for his comments. He will know that the fortunes of the shoe industry have been improving. From February to September of last year the industry created another 1,900 jobs, and the number of people working overtime increased last year from 5,800 to 9,600, so generally things are looking up for the industry.

Mr. Ashdown: Is the Minister aware that many in the footwear industry believe that the key sector for Government assistance should be not so much the purchase of new machinery as the funding of assistance for new ideas and innovation? Why is it that on the one hand the Minister has found £20 million to help purchase new machinery, while on the other innovation grants have been cut to from 33 to 25 per cent. and the scope on project size has also been reduced?

Mr. Lamont: The new scheme will apply specifically to advanced technological machinery, which is in itself helping innovation. The hon. Gentleman will know that we are giving aid to design, and design innovation is one of the most important things.

Mr. Marlow: As my hon. Friend doubtless wears British footwear, would he like to take this opportunity to extol its virtues so that the rest of our fellow countrymen might likewise be discriminating and buy the best value that is available?

Mr. Lamont: I am not sure that I ought to show off my shoes, as I think I have a hole in one of them, but I certainly wear British shoes.

Mr. Janner: Is the Minister aware that in areas such as Leicester, which rely greatly on the footwear industry, there has been a catastrophic drop in employment for so long that the Government's measures, while welcome are far too few and far too late? I seek an assurance from him that these are the beginning, and not the end, of the measures that the Government intend to take to assist.

Mr. Lamont: I think that the hon. and learned Gentleman should live in the present as well as in the past.


Output in the footwear industry has increased, employment has increased, and exports are increasing. That is not a bad situation.

Mr. Bowen Wells: Can my hon. Friend reassure us that he is not lurching into export subsidy and protection in the measures that he has taken, and will he make certain that the industry becomes far more efficient and pays attention to that aspect of its work?

Mr. Lamont: I can give my hon. Friend that assurance. The help announced by my right hon. Friend is specifically for capital investment. It is not an operating subsidy.

Mr. Williams: Is the Minister aware that this scheme has been received with far less enthusiasm by the industry than it has by some of his hon. Friends because it falls far short of what was required, and because it excludes the major companies such as K Shoes, C and J Clark, Start-rite Shoes Ltd. and BSC, which employ over half the work force in the industry? Those companies are excluded, although, like the rest of the industry, they are facing the same cash flow problems, resulting from the 30 per cent. increase in leather prices, and are facing intense import competition, which will become even worse if later this year the United States introduces quotas and so leaves the Common Market as the only open market in the world.

Mr. Lamont: We have of course made our concern very clear to the United States on the matter that the right hon. Gentleman mentions. I do not think that the right hon. Gentleman, in discounting the improvement that is taking place in the footwear industry, should ignore the considerable advantages that exist for operating business in this country. As to competition, France has inflation rates that are nearly twice as high as those in the United Kingdom, while those in Italy are 2·5 times higher, and those in Belgium 50 per cent. higher than they are here. One has to look also at the levels of interest rates. They are much higher in many EEC countries than they are here, which enables us to compete with the EEC as well.

BSC(Special Steels Venture)

Mr. Hardy: asked the Secretary of State for Trade and Industry if he will ensure that the British Steel Corporation will hold such a share of the equity of any new special steels venture which will reflect the share of the assets provided by the corporation.

The Secretary of State for Trade and Industry(Mr. Norman Tebbit): The capital structure of any such joint venture is a matter of negotiation between the boards of the companies involved. However, I know that both parties are concerned to ensure that any agreed arrangement properly reflects their relative contributions.

Mr. Hardy: The Minister's answer is in part reassuring, but will he confirm that in the envisaged Phoenix 2 company three quarters of the assets will come from the British Steel Corporation, and that those involved in the industry, and those interested in it, are keen to ensure that, after three years of furtive plotting and corrosive anxiety, there will be no justification for an accusation of what might be seen in Yorkshire as daylight robbery even if it is not so seen in Whitehall?

Mr. Tebbit: I think that there are some curious ideas about daylight robbery in Yorkshire, if that is the hon.

Gentleman's definition. What he has to take into account is the real value of the assets that are contributed, and the assets that are loss-making are not necessarily to be taken as being valued at their cost.

Mr. Duffy: Is the Secretary of State aware that it is not only equity for BSC that is being looked for in the long-delayed statement about the outcome of Phoenix 2, but the public interest, and will he dismiss rumours that the reason for this long delay is that he is being looked to for a further £100 million for a new arrangement which eventually is to go private?

Mr. Tebbit: I am not responsible for the rumours, or for any dismissal of them.

Mr. Ewing: What does the Secretary of State's answer mean? Does the right hon. Gentleman mean that if the British Steel Corporation contributes 75 per cent. of the assets to the Phoenix 2 project he is in favour of the Corporation holding 75 per cent. of the equity? If he is not, why is he not? Did he not hear the Prime Minister yesterday pay a glowing tribute to the British Steel Corporation and the workers in that industry? Why does he not share the same confidence in transferring that to the Phoenix 2 project?

Mr. Tebbit: The Prime Minister and I have considerable admiration for the strides made by the BSC under its new and more enlightened management. That does not mean that we do not also have regard for the private sector and its enlightened work force and management.
The hon. Gentleman must have misheard me. It is no good saying that an asset is valued at £X million, perhaps because that is what it cost or what it is listed at in the books. It is a question of what the asset is worth in earning power, either where it is or with a new company. These are matters for discussion and mutual agreement between the boards concerned.

Grant Applications

Mr. Bruce: asked the Secretary of State for Trade and Industry how many grant applications were approved (a) in England and Wales and (b) in Scotland under section 8 of the Industry Act for the last financial year; and what was their total value.

The Under-Secretary of State for Trade and Industry(Mr. John Butcher): In the last financial year, 106 offers of assistance totalling £11·1 million were made to companies in Scotland under section 8 of the Industrial Development Act 1982. The figures for England and Wales were 1,748 offers worth some £84·5 million in total.

Mr. Bruce: Does the Minister acknowledge that a high proportion of those offers were made to firms and regions which already qualify under section 7? In the revised regional policy put forward in the White Paper, will the Minister give priority to section 8 applications from companies not in areas which already benefit so that projects will not be lost to the United Kingdom, as might otherwise happen?

Mr. Butcher: Section 8 assistance is available on a national basis, using impartial criteria such as additionality and viability. There is no discrimination within that scheme against any region. Whether an application comes from an assisted area is not taken into account.

Mr. Bill Walker: Does my hon. Friend agree that the figures show clearly that the Government are still pursuing a policy which means that Scotland is getting more than its share relative to the United Kingdom population?

Mr. Butcher: My hon. Friend is absolutely right. Scotland has 8 per cent. of its population employed in manufacturing, it is receiving 13 per cent. by value of section 8 offers. Scotland is doing very well from section 8 facilties.

Mr. Eastham: Is it not a fact that there are no clear criteria dealing with section 8? Do not the Government, therefore, always say that they reserve their position? What issues are involved when the Government talk about projects of national significance? How can authorities know if they come within the criteria?

Mr. Butcher: The criteria are clearly documented and well known to our officials in the regional offices. They are communicated to all applicants, who are given impartial and objective guidance on their chances of compliance with the criteria.

Mr. Shore: Is it not true that the selective assistance under section 7 has been smaller during the most recent year than it was four or five years ago, both for Scotland and throughout Britain as a whole? What provision has been made — whether an increased provision, a static provision or a declining provision — in the public expenditure White Paper for sction 7 expenditure during the next three years?.

Mr. Butcher: It is a question of a balance between automatic and discretionary assistance. Discretionary assistance includes sections 7 and 8. That will be tackled through our White Paper, which will be available for true consultation on the assisted area policy generally.
I take this opportunity to point out that, if we add section 7 and section 8 grants together, Scotland receives 28 per cent. by value of the discretionary assistance available to the United Kingdom.

Cars(UK Content)

Mr. Roger King: asked the Secretary of State for Trade and Industry whether he has received representations from the British motor component industry about the levels of United Kingdom content in British produced cars.

Mr. Norman Lamont: The Department remains in regular touch with representatives of the component industry. The level of domestic business provided by car manufacturers in the United Kingdom is one of a number of questions addressed in these exchanges from time to time.

Mr. King: Is my hon. Friend aware that at present in Japan 18 major United Kingdom component suppliers are selling on quality, price and delivery? Is it not high time that some of the so-called United Kingdom car manufacturers in this country — General Motors and Ford—made use of the same component suppliers?

Mr. Lamont: As my hon. Friend knows, we have discussed local content with the multinational companies operating in this country. We have also said in the House that we expect motor companies established in this country to maintain a broad balance in their activities—that is,

to build vehicles and buy components in the United Kingdom at a level that is at least broadly equivalent to their United Kingdom sales. That is what we have publicly stated, and it is a matter that we shall continue to discuss with them.

Mr. Geoffrey Robinson: Does the Minister agree that successive Governments have not put over £1 billion into British Leyland to see it proceed with widescale sourcing of overseas components. Will he look, in particular, at Dunlop in my constituency—the last remaining United Kingdom British wheel manufacturer—which has been mercilessly screwed to the ground by British Leyland and is unable to take up an investment allowance from the Government to proceed with a major modernisation scheme that has been pending for two or three years?

Mr. Lamont: I have had many discussions with Dunlop and with the hon. Gentleman on this matter. Austin Rover is anxious to buy British wherever possible, and wherever it is economic, and to treat British suppliers on at least equal terms with those from overseas. However, Austin Rover has to be a competitive company. It is fighting for survival.

Mr. Pawsey: I appreciate the need to buy the best components at the best possible prices, but does my hon. Friend agree that a healthy components industry is a prerequisite to a healthy motor industry in Britain?

Mr. Lamont: I agree with my hon. Friend. That is why we are talking to the multinational companies about local content, and that is why, with Nissan, we have imposed such a stringent local content. We still have a healthy components industry, because we have a substantial surplus in trade in vehicle components.

Mr. Hal Miller: Does my hon. Friend agree that it is unreasonable to criticise Austin Rover or other parts of British Leyland which maintain an 85 per cent. United Kingdom content while having to compete with other manufacturers in this country which have a much lower utilisation and, at the same time import another half again of their sales? Would it not be more sensible to take the line that our components industry needs to be more competitive, and will he try to assist in that process?

Mr. Lamont: I entirely agree with my hon. Friend. I sometimes suspect that, simply because Austin Rover is a Government-owned company, there is a tendency to try to get the Government to intervene in these decisions, which should be commercial decisions.

Mr. Shore: The Minister referred to the anxieties expressed by the British components industry, particularly about the Nissan deal, and he pointed out that the local content agreement was negotiated, presumably. to alleviate those anxieties. What is the use of a local content agreement when local content is defined not as United Kingdom content, but as Common Market content? What help is that to British industry?

Mr. Lamont: I am not quite as pessimistic as the right hon. Gentleman about the merits of the United Kingdom components industry. With a 60 to 80 per cent. local content requirement — [Interruption.] — Yes, it is European, but I believe that British companies will get a large share of that, and I believe that as a result the United Kingdom content of Nissan cars will be far higher than that of some other assemblers in this country.

South Korea(Imports)

Mr. Sayeed: asked the Secretary of State for Trade and Industry what representations he has made to South Korea on the liberalisation of British imports into that country.

The Minister for Trade (Mr. Paul Channon): I took the opportunity when visiting Korea recently to press the Korean Government to liberalise their domestic market for imports, particularly for consumer goods. That includes the removal of quotas as well as tariff reductions.

Mr. Sayeed: I welcome my right hon. Friend's statement and ask whether he knows that Mr. George McWatters, the chairman of Avery the wine merchants in Bristol, is interested in selling whisky to South Korea? Can he tell me whether the South Koreans made a favourable response on the liberalisation of import controls on alcoholic beverages so as to meet consumer demand?

Mr. Channon: I raised this matter with the Korean Government and pointed out that this was a very important British interest. I hope that we shall make progress on this issue. The Korean Minister of Commerce is corning here next month and I shall make sure that my hon. Friend's points are drawn to his attention.

Mr. Flannery: Does the Minister not realise how important this question is, not just for whisky, but for imports generally? Does he know, for instance, that South Korea has taken the bulk of the British cutlery industry, which was centred on Sheffield, and that imports coming to Britain now, which can be seen on practically every table, bear the mark "Sheffield plated"? That is printed on the cutlery before it comes to Britain, and it is only plated here. We now have about 4 per cent. of the cutlery industry that we had hitherto, and Korea is one of the worst offenders in this respect.

Mr. Channon: If the hon. Gentleman has evidence of counterfeiting, I shall be glad to take that up. On the general level of imports from Korea, it must suit British industry and the House if we increase our exports to Korea as Korea increases its exports to us. The House will be pleased to know that exports to Korea have virtually trebled in the past three years.

Mr. Gould: Is not the real problem of our trade with South Korea exactly the same problem that arises in our trade with so many other countries, namely, that our exports of manufactures remain static, while there has been an enormous increase in imports? Is the Minister aware that our trade deficit in manufactures with South Korea rose by almost 100 per cent. to £270 million last year? What will he do about that, other than making laughable statements about improvements in our competitiveness since 1979?

Mr. Channon: What I find absolutely astonishing about that question is that today of all days hon. Members should criticise the trade figures when a surplus of £800 million was announced yesterday. I should have thought that hon. Members would be cheering and congratulating us on that, rather than complaining as usual.

House Transfers

Mr. Bowen Wells: asked the Secretary of State for Trade and Industry whether he will invite representations

from organisations or persons outside Government to the interdepartmental committee established to investigate means by which the current practices of house transfer can be made more efficient, cheaper and quicker, so far as they relate to matters within the responsibility of his Department.

Mr. Tebbit: Yes, Sir. My colleagues and I welcome contributions both to the committee under Professor Street on non-solicitor conveyancing and to the interdepartmental committee on house transfer.

Mr. Wells: I thank my right hon. Friend very much indeed for that reply. What sort of timetable is the Department working to, and what period will people and hon. Members have to contribute their evidence to that interdepartmental committee?

Mr. Tebbit: The interdepartmental group hopes to report to Ministers by the autumn. While there is no time limit at the moment on representations to the committee, we should be grateful if they were brought forward as soon as possible.

Mr. Campbell-Savours: May we have an assurance that if building societies are given the right to convey they will not use their commanding grip on the transaction as lenders to require the borrower to use their services at perhaps an even higher charge than would otherwise be available outside?

Mr. Tebbit: The Lord Chancellor's consultative paper on possible conflict of interest among employed solicitors, as for example of building societies engaged in conveyancing, is expected to be published shortly, and that will also cover aspects of possible anti-competitive practices to which I think the hon. Gentleman is referring.

Manufacturing Competitiveness

Mr. Boyes: asked the Secretary of State for Trade and Industry what improvement in competitiveness would be needed to enable the United Kingdom to balance its trade in manufacturing.

Mr. Channon: Such an improvement as is necessary to cause customers to buy British goods rather than foreign goods.

Mr. Boyes: Does the Minister agree that one of the many indicators of the Government's disastrous policies caused by their blind adherence to scientifically unproven monetarist policies is the massive trade imbalance in manufactured goods? Is it not true that the lack of ability to compete is costing us hundreds of thousands of jobs and leading to massive unemployment? In my constituency there is 30 per cent. male unemployment. What will the right hon. Gentleman do about that?

Mr. Channon: Again I have to say that I am absolutely astonished that the hon. Gentleman should put that question to me today. Exports by volume are 7·5 per cent. higher in the latest three months than in the previous three months, and 9·5 per cent. higher than a year ago. British industry, through its quality, reliability and delivery, is selling more and more abroad. Why are hon. Members so critical?

Mr. Kenneth Carlisle: Did not Labour Members, when in government, substantially increase the costs falling on industry in one Budget after another? Did not


we in the last Budget substantially reduce the costs on industry, a step that will do more than anything else to help us to be more competitive in our exports?

Mr. Channon: I entirely agree with my hon. Friend. The Budget will reduce by £900 million in the coming two years the total tax burden on the corporate sector. We are doing more to help industry than Labour ever dreamt of doing, and this afternoon we shall be discussing ways of removing the unfair burden of rates that so many Labour local authorities would like to impose.

Mr. J. Enoch Powell: What particular benefit is there to a nation in balancing its trade in manufactures?

Mr. Channon: That is a question that the right hon. Gentleman should perhaps address to those sitting near him. [HON. MEMBERS: "Answer."] It is perfectly clear, although the Opposition fail to recognise it, that it is impossible for this country to run for ever a surplus in manufactures — in oil and all other goods — unless Opposition Members are prepared to see a substantial outflow of capital, which is another aspect about which they complain.

Mr. Terlezki: How much damage does my right hon. Friend think Mr. Scargill and his apparatchiks are doing to our industries and balance of trade by their political bully tactics—

Mr. Speaker: Order. That supplementary question goes very wide of the main question.

Mr. Nellist: Will the Minister explain why, since the appointment of the Under-Secretary of State for Trade and Industry, the hon. Member for Coventry, South-West (Mr. Butcher), as the Minister responsible for the west midlands we have lost one job for every half hour of his appointment? Does he agree that his answer to my hon. Friend the Member for Houghton and Washington (Mr. Boyes) should have taken into account the fact that Britain, to be competitive with Japan, Germany or America in manufacturing, would require annually 40 times more investment in manufacturing industry than the right hon. Gentleman's mates in big business are prepared to make? When does he think that that position will be reversed and we can get the 5 million on the dole back to work?

Mr. Channon: The Opposition are scoring an own goal today. It is ridiculous that they should be putting such questions to me the day after figures have been published showing that last month we exported, in manufactures, the largest amount in value in British history.

Mr. Richard Page: Does my right hon. Friend agree that Government support of £200 million-plus for the Alvey programme and our support for the £850 million EEC ESPRIT programme will do much to increase the competitive base of our hardware and software companies, so enabling us to close trade gaps and provide jobs for our people?

Mr. Channon: My hon. Friend puts his finger on an extremely important point. We want to see British industry being able to sell its goods throughout the world. We have already seen an enormous increase in British reliability, in our competitiveness and in the quality of the goods that we deliver. I only wish that hon. Members on both sides of the House would join in the general welcome that is felt throughout the world for Britain's performance.

Mr. Shore: I warmly welcome the change in trend in the British trade figures, as published today, and I hope very much that they will be sustained, because on our success in this area depends all our hopes for the future. Having said that, may I draw the right hon. Gentleman's attention to the figures that he provided for us yesterday? More than £400 million of the trade improvement in the single month is represented by our trade with the United States. To what does he attribute this welcome and dramatic change in our trade with America? Does he put it down to the continued effect of the massive depreciation of sterling against the dollar; to the fact that the United States economy is expanding more rapidly than any other economy in the Western world; or to the increase of 6 per cent. in productivity in the performance of British industry in the past year?

Mr. Channon: I am sure that all the factors mentioned by the right hon. Gentleman were involved in the British performance last month in the United States. I draw the right hon. Gentleman's attention to the fact that last month our exports to a great many other parts of the world increased dramatically. The House will not wish to read too much into one month's figures, but I am glad that the right hon. Gentleman pointed to the astonishing rise this year and last year in productivity in British industry. I hope that will long continue. As long as it does, British industry will do better.

Insurance Contracts(Disclosure)

Mr. Janner: asked the Secretary of State for Trade and Industry whether measures reforming the law of duty of disclosure in insurance contracts will be introduced in the present parliamentary Session.

Mr. Butcher: No, Sir. However, it remains the Government's intention to introduce legislation to reform the law on non-disclosure in relation to insurance contracts affecting private consumers as soon as legislative time is available.

Mr. Janner: I welcome that assurance. When will the Department's current review of the law on material nondisclosure be completed? When does the Under-Secretary of State expect to have legislative time available to remove this totally unreasonable protection that is held by insurers, so that the people who are insured receive the cover they have bought when they most need it?

Mr. Butcher: I am sure that the hon. and learned Gentleman will be encouraged to know that the Law Commission's report has been a basis upon which consultations have been held. A number of the matters, about which the hon. and learned Gentleman has been anxious will be incorporated in our legislation. We have said that we wish to introduce legislation as soon as possible, but the hon. and learned Gentleman will not expect me to pre-empt the contents of the Queen's Speech.

Mr. Cockeram: Does my hon. Friend accept that insurance contracts have always relied on the utmost good faith by both parties to the contracts and that, no matter how he seeks to alter the law, he cannot prescribe for every eventuality? In practice, therefore, the principle of utmost good faith by both parties must continue to apply, whatever steps he takes to alter the law.

Mr. Butcher: The principle of good faith will continue to apply. A definition will be made of what is "reasonable"


in terms of reasonable disclosure. The Government agree with the Law Commission that voluntary undertakings by the industry are not a substitute for reforming an unfair law.

Mr. Williams: As the Under-Secretary of State has no intention of introducing legislation, what action does he propose to help the victims of the 20 companies that collapsed and that had been offering extended guarantee insurance to their unfortunate victims? Will the hon. Gentleman confirm that thousands of consumers not only lost their premiums but, because of the availability of those phoney guarantees, have been conned into buying secondhand cars, which they probably would not have bought without closer inspection? They have been deprived of protection under consumer protection legislation. False representations were made about the relationship with Lloyd's of the bust companies. On top of all this, the victims are finding that many retailers are trying to evade their responsibility for the one-year guarantee, which applies regardless of the collapse of those firms. Why is the Under-Secretary of State doing nothing? Why is he not warning the public of the risk? Why is he not giving guidance about the bona fide firms?

Mr. Butcher: Extended guarantee insurance is not pertinent to this question, although it is pertinent to a number of other questions tabled by hon. Members, which will be answered in due course. In my earlier answer I said that we planned to introduce legislation at the earliest possible time. The hon. Gentleman knows the considerations that must be borne in mind. I cannot and will not preempt the contents of the Queen's Speech.

Gower Report

Mr. Silvester: asked the Secretary of State for Trade and Industry why he will not make a statement on the recommendations of the Gower report on investor protection before 30 April.

Mr. Tebbit: The report is open for comment until 30 April, and I prefer to consider the comments made before rather than after making any statement.

Mr. Silvester: I agree with that general proposition. Can my right hon. Friend confirm that the large number of interests involved in this exercise will not lead to any delay in implementing the report? Has my right hon. Friend not yet ruled out the possibility of including the necessary legislation in the next Queen's Speech?

Mr. Tebbit: I, too, shall refrain from pre-empting what may or may not be contained in the Queen's Speech. I have not yet made decisions on the Gower report. I have asked all those involved to consider Professor Gower's proposal in a constructive and positive spirit. I have said that his proposals may show a way forward, but there is a good way to go yet before we reach our conclusions.

Mr. McCrindle: But is it not more likely that, after receiving the representations that the Government have asked for by 30 April, they will wish to issue a White Paper setting out their own broad lines of thought? As that White Paper is unlikely to be produced until later in the year, the balance of probability is that legislation will not come before the House until the 1985–86 Session.

Mr. Tebbit: My hon. Friend rightly points to some of the constraints that would be upon us in attempting to legislate in haste.

Mr. Gould: Having, perhaps unwittingly, unleashed the rapid, wide-ranging and unpredictable change in the financial institutions, which no doubt the right hon. Gentleman and the City both sought to avoid, how much loger can he leave the chaos and confusion to voluntary regulation, which can only work, if at all, if there is much more stability? Is there not an immediate need for action on the Gower report?

Mr. Tebbit: I think that the hon. Gentleman would do well to learn from the supplementary question of my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle). Surely he does not expect us to rush into legislation on such matters without due thought and proper consultation. His trouble is that he is more surprised than anyone by the extent of the changes that are taking place in the City. When my right hon. Friend the Member for Hertsmere (Mr. Parkinson) announced the proposals that led to the withdrawal of the Stock Exchange case from the courts, the hon. Gentleman and his colleagues sneered and said that it was a fix-up. They claimed that we were doing a favour to our friends in the City to prevent any change. The hon. Gentleman was wrong then, he is wrong now and he will probably be wrong for the rest of his life.

Sub-post Offices

Sir William van Straubenzee: asked the Secretary of State for Trade and Industry whether he proposes to give encouragement to proposals to permit sub-post offices to be opened in partnership with other commercial activities such as petrol stations.

Mr. Kenneth Baker: It is for the Post Office itself to make commercial decisions about where to place sub-post offices. I understand that a number of sub-post offices already operate from petrol stations, including some in my hon. Friend's constituency.

Sir William van Straubenzee: I recognise the difficulty, in rural areas especially, in maintaining the present number of sub-post offices, but will my right hon. Friend apply his considerable intellect to encouraging roving thought and unusual partnerships so that this benefit can be available to the community, especially to the elderly and those on modest incomes?

Mr. Kenneth Baker: I thank my hon. Friend for the tortuous compliment that he paid me. The Post Office is prepared to be flexible when receiving applications from various trading entities and enterprises for the placing of sub-post offices. The only places where sub-post offices cannot be placed are betting shops. They are only rarely placed in pubs.

Mr. Ashdown: Does the Minister recognise that the sub-post office, which is so vital to rural areas, is in large 'Measure dependent on the survival of a network of retail outlets? Has he read the recent COSIRA report, which predicts that perhaps 50 per cent. of village shops might close? What steps might the Government consider taking to ensure that that does not happen?

Mr. Kenneth Baker: I accept that in many instances the village shop with the post office attached is an essential part of village life. The proposals of the Post Office in the recent review of the sub-post office network will have no effect on the rural network. I can assure the hon. Gentleman that the Government are well aware of the importance of that network.

Mr. Nicholas Baker: Is my right hon. Friend aware that his reply will be greeted with a welcome from those living in rural areas? Will he do everything that he can to encourage greater flexibility by the Post Office towards partnerships and encourage mobile sub-post offices in rural areas?

Mr. Kenneth Baker: I accept what my hon. Friend has said. I re-emphasise that the Government fully accept the importance of the rural sub-post office. These sub-post offices are not merely places to buy stamps. They are where communities, especially the elderly, come together to buy groceries and to participate in what is almost a meeting place.

Mr. Ewing: Does the Minister accept that most sub-post offices are not in rural areas but are in dispersed parts of urban areas? Will he give an absolute assurance that before any changes are implemented on a widespread basis he will encourage the Post Office and to look at this issue and have discussions with the National Federation of Sub-Post Masters and the Union of Communication Workers? Will he further assure the House that the practice of opening in partnership with other undertakings will not become widespread at the expense of Crown post offices and sub-post offices or the jobs that they provide?

Mr. Kenneth Baker: As the House knows, the Post Office put forward proposals to the Government following its review of urban sub-post offices, which was necessary because of population changes and other considerations. I emphasise the long-established criterion that no one living in an urban area should have to travel more than half a mile to a post office counter. The Post Office has submitted proposals, and there is wide consultation taking place with sub-postmasters. I assure the hon. Gentleman that the Government must be satisfied that all interests have been taken into account, including those of consumers, before any decisions are made.

A320 Airbus

Mr. Colvin: asked the Secretary of State for Trade and Industry if he will make a statement on the latest state of the orders and options for the A320 Airbus and the total cost of the project.

Mr. Norman Lamont: To date, 51 firm orders and 45 options for the A320 have been obtained from five airlines. The total development cost of the project is currently estimated at around £1,800 million.

Mr. Colvin: I am sure my hon. Friend will agree that those figures show that the Government have backed a potential winner by approving launch aid for the A320. Might not the order book look a little better if Airbus Industrie adopted more aggressive marketing policies, along the lines of its American competitors? Is there not room for making the consortium more accountable both to its partners and the public who, as taxpayers, provide the largest slice of AI's funding?

Mr. Lamont: I am not quite sure what my hon. Friend means by more aggressive marketing policies. Airbus Industrie has been very aggressive in its marketing, and extremely successful. I agree with what my hon. Friend says about internal management. The undertaking is large, so it is important that AI's management should be

strengthened and that the organisation is equal to the enormous task that it has taken on. We are discussing that matter with the industrial partners.

Mr. Carter-Jones: Will the Minister approach his right hon. Friend the Secretary of State, with his undoubted charm, and ask him to persuade British Airways to buy the A320? Will the Minister take into account the need to increase the British share in the high technology of the V2500 and the need for a larger part of the avionics for the aircraft to be built by people in areas of high unemployment?

Mr. Lamont: I am sure that the hon. Gentleman spoke of my charm, although his question was ambiguous. I assure him that British Airways will give full consideration to the A320 in assessing its future aircraft requirements. I know that it will consider it. With regard to components, we have been pressing the case with Airbus Industrie because we believe that the British components industry, which is very competitive, as is demonstrated by its record in America, might well play a greater role in the Airbus project. I agree with the hon. Gentleman that the Airbus will be offered with the superb V2500 engine, which will add to the quality of the aircraft.

Mr. Gerald Howarth: Can my hon. Friend tell us whether one of the factors to be taken into account by British Airways is the availability of the V2500 engine? Will he assure the House that he is putting pressure on Rolls-Royce to bring forward the engine's development so that it can be offered for the first aeroplane that comes off the production line?

Mr. Lamont: Rolls-Royce needs no pressure from the Government. The engine has already been launched. It is for the airline to decide which engine to use, but, as my hon. Friend knows, British Airways has been a large customer of Rolls-Royce.

Product Design

Mr. Chapman: asked the Secretary of State for Trade and Industry if he will report progress in his campaign regarding the importance of design in products.

Mr. Butcher: Yes, Sir. The Government continue to give priority to their campaign to encourage a greater awareness in British industry and commerce of the value of good design, as is clear from the announcement made by my right hon. Friend the Secretary of State on 19 March. I shall announce further initiatives when I have completed my review of design activity.

Mr. Chapman: Can my hon. Friend give the House some idea of the take-up rate for the design advisory service-funded consultancy scheme? I appreciate that it may be too early to form a considered judgment, but is there evidence that my hon. Friend's initiatives, which I applaud, have already had a beneficial impact on product design?

Mr. Butcher: Since the design for profit campaign was started — it has now been concluded — the rate of application for help under the design advisory service-funded consultancy scheme has trebled. About 1,400 applications have either been completed or are in the process of being completed. According to our assessment of the scheme's efficacy, most of the applicants say that they are highly satisfied with the results.

Mr. Campbell-Savours: Is it not true that the number of industrial design student places at faculties of industrial design in polytechnics and universities has been cut since 1979?

Mr. Butcher: That question arises from the national advisory board exercise, to which no doubt the hon. Gentleman is referring. That is a matter for my right hon. Friend the Secretary of State for Education and Science. Some aspects of our consideration of additions to the design policy will affect the education service, schools, and further and higher education.

Mr. Nicholas Winterton: I warmly welcome the announcements by the Secretary of State about the textile, clothing, footwear and allied industries, related to design. Will my hon. Friend be more forthcoming about the aid that the Government intend to give to the textile and clothing industry with the promotion of design, which has made great advances in recent years? Will my hon. Friend deal at greater length with the valid question raised by the hon. Member for Workington(Mr. Campbell-Savours), which covered the problem that has been created by the reductions in design departments in our colleges of further education, polytechnics and universities?

Mr. Butcher: A major part of my hon. Friend's question was met by comments made by my hon. Friend the Minister of State in an earlier question. As I said, the new appraisal of design policy will take those issues into account. Thus far my Department has committed resources to curriculum development in design for things such as design management at schools level and FE and HE levels. Of course an improvement must be made. I cannot tell my hon. Friend how we shall go about making that improvement.

Mr. Williams: Is not the high priority for design that the Minister states he gives to it a comdemnation of the fact that in the past few years the Government have systematically cut back in training for design, as my hon. Friend the Member for Workington(Mr. Campbell-Savours) said?

Mr. Butcher: British industry's use of our domestic design talent matters most of all. We could make better use of that national resource, which is as strong as the resource of North sea oil, if British designers working for British companies were making products manufactured in the United Kingdom. That is part of our initiative and a means of maximising our resource in that area.

Schools (Microcomputers)

Mr. Galley: asked the Secretary of State for Trade and Industry what further steps he proposes to take when his "micros in schools" schemes end.

Mr. Kenneth Baker: The current "micros in schools" schemes will be completed at the end of this year. No decisions have been made on further steps that my Department might take.

Mr. Galley: I welcome this important and creative initiative by my hon. Friend, and its success. Will he assure the House that there will be a continuing commitment by his Department to ensure that schools remain abreast of new technology, and that school leavers are computer-literate and employable?

Mr. Baker: It is true that the scheme has been very successful, and it is widely recognised as such in the country. All our secondary schools now have at least one microcomputer. I hope that by the end of the year all our 27,000 primary schools will have one. With regard to a general improvement in technology, I give my hon. Friend the assurance that he seeks. We are looking at other areas where we can ensure that the youngsters of today have a good technical background and grounding at school.

Mr. Flannery: No matter how admirable the scheme may be, will the Minister give an assurance that the massive cuts in education, which mean that teachers in every staff room in the country are worried, will not be intensified because of the scheme? Will he liaise with the Department of Education and Science to ensure that?

Mr. Baker: There is strong liaison between our two Departments. We have provided about £16 million for computer hardware over the past three years. The Department of Education and Science provides about £20 million for teacher training and electronic software developments—the textbooks of today.

Mr. Batiste: Will my hon. Friend accept that one of the most serious potential bottlenecks threatening the future development of new industries is the availability of skilled people capable of carrying out high technology work? Is not the "micros in schools" scheme an important foundation for the provision of a skilled work force in future, and should it not be extended as a high priority?

Mr. Baker: My hon. Friend is absolutely right. Skilled, technologically literate people are needed at the ages of 16, 18, 21 and 24.

Mr. Stott: The Minister will be aware that the principle of providing micros in schools has the full support of the Opposition, for the reasons just given by the hon. Member for Elmet(Mr. Batiste). However, if we are to capitalise upon the good work already being done, further resources and a continuing programme are needed. Can the Minister assure us that he will sympathetically consider the setting-up of a further scheme once this scheme has come to an end.

Mr. Baker: The principal funding of schools must come from the Department of Education and Science. My own Department's role in making money available over the past three-and-a-half years has been essentially catalytic. We saw a need that had to be met. We have extended the scheme, and I am looking at other proposals to improve technology training at O and A-level.

Privatisation

Mr. Andrew MacKay: asked the Secretary of State for Trade and Industry if he is satisfied with the progress of selling state-owned companies which are within his Department's responsibility.

Mr. Tebbit: Whilst I am always anxious to make swifter progress, I am satisfied that as many as possible of the public sector enterprises for which I am responsible are being transferred to the private sector as swiftly as practicable.

Mr. MacKay: In the light of that reply, will my right hon. Friend confirm that, whenever possible, the Government will give priority to management buy-outs?

Mr. Tebbit: We always look with favour upon management buy-outs where they are in the best interest of the company, taking into account the interest of the taxpayer.

Mr. Ryman: While the Minister is selling valuable state assets to his friends, will he consider whether he is legally entitled to do so and whether he is selling them at artificially low prices?

Mr. Tebbit: The hon. Gentleman would be right to assume that we are quite certain that we have the powers to undertake the sales, not least through the primary legislation that is being enacted. The sales are sometimes extremely welcome to all concerned, as is the Scott Lithgow deal, about which my hon. Friend the Minister of State will answer a question later today.

Mr. Grylls: Could my right hon. Friend give the House some news about Jaguar? Does he agree that most sensible people wish to see Jaguar returned to the private sector as soon as possible? Like my hon. Friend the Member for Berkshire, East (Mr. MacKay), I hope that when that happens adequate provision will be made for the staff of that successful company to participate in its success.

Mr. Tebbit: I go further than my hon. Friend. All sensible people will welcome the return of Jaguar to the private sector. The discussions taking place within British Leyland and between it and my Department are concerned with the arrangements that must be made if Jaguar is to be returned to the private sector. I hope that that result will be achieved before too long. I hope that there will be appropriate arrangements for the work force to buy shares, as there have been in the case of other returns to the concept of true public ownership—by which I mean ownership by ordinary people holding shares, and not ownership by the state.

Mr. Shore: Is the Secretary of State aware of any other western European country that owns important industrial enterprises and is planning to follow the example of the British Government and simply sell them off? If he does not, I wonder why that should be.

Mr. Tebbit: I am interested to learn that the right hon. Gentleman thinks that wisdom is to be found among foreigners rather than among British people. I am also

interested to learn that he is unaware that more of our industry is in the public sector than is the case with most of our commercial rivals. That might have something to do with our commercial failures.

European Community(Frontier Formalities)

Mr. Fallon: asked the Secretary of State for Trade and Industry what steps he is taking to simplify formalities at frontiers within the European Economic Community so far as they restrict the movement of trade.

Mr. Channon: The Government have played a leading role in getting Council time devoted to reducing frontier formalities. We have concentrated, with some success, on better opening hours at customs posts, cutting down documentation and faster clearance of lorries.

Mr. Fallon: Why are countries such as France and Italy still allowed to cripple the free flow of goods by bureaucratic customs procedures, and when can Darlington Hauliers, which was caught up in last month's strike, expect either compensation or faster action by industry Ministers to complete the market?

Mr. Channon: I entirely agree with my hon. Friend that it is strongly in British interests to reduce ridiculous administrative and other formalities at frontiers. We are making progress and there will soon be one form, rather than about 11, to fill in. I assure my hon. Friend that we shall continue to press for action on that front.

Mr. Hugh Brown: On a point of order, Mr. Speaker.

Mr. Speaker: I shall take points of order after the private notice question.

Mr. Brown: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I normally take points of order after Question Time. I call Mrs. McCurley to ask a private notice question.

Mr. Brown: rose—

Mr. Speaker: Order. I said that I would take the point of order after Question Time.

Scott Lithgow

Mrs. Anna McCurley: (by private notice) asked the Secretary of State for Trade and Industry if he will make a statement on Scott Lithgow.

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): As the House knows, discussions have taken place with a number of companies interested in taking over Scott Lithgow. The Government have been concerned throughout to minimise any further cost to the taxpayer, who has already put a huge amount of cash into Scott Lithgow.
My right hon. Friend the Secretary of State for Trade and Industry today gave his formal consent to the sale of Scott Lithgow to Trafalgar House.
Under the new ownership, Scott Lithgow will now complete the Britoil contract, as well as the other work in the yard, and seek new work. The costs of this deal for British Shipbuilders are broadly the same as those which would have arisen if the Britoil contract had been lost and the yard run down and closed. However, there are wider benefits arising from the maintenance of jobs at Scott Lithgow. Instead of the severe blow to Greenock of closure of the yard, this deal holds out a prospect of a substantial operation continuing and, I hope, expanding. It also means the acquisition of the yard by an experienced United Kingdom offshore operator, which has vast financial, managerial and technical resources and the retention of hard-won and valuable experience in the forefront of offshore technology.
I am sure that the House will join me in welcoming this transfer of Scott Lithgow to the private sector. It offers a real hope for the people of Greenock and for the future of shipbuilding on the lower Clyde.

Mrs. McCurley: I congratulate my hon. Friend the Minister of State and my right hon. Friend the Secretary of State for Scotland on the successful and expeditious way in which the deal has been concluded. What are the terms of the deal and what will be the consequences for British Shipbuilders?

Mr. Lamont: The Scott Lithgow company will be reconstructed to enable it to meet its existing liabilities, part of which will be repaid and the remainder written off. Substantial liabilities would, of course, have had to have been met whether the yard was sold, closed or retained by British Shipbuilders. Trafalgar House will buy the shares of the company for £12 million, £3 million to be paid immediately and the rest over three years with a commercial rate of interest applied to those deferred payments. The effect will be that Trafalgar House will buy for £12 million the currently bankrupt Scott Lithgow, reconstructed so as to be able to meet its existing liabilities and the cost of essential rationalisation. The net cost of the deal, after taking account of the purchase price and some deferred loans which form part of the transaction, is £71 million. This is broadly equal to the cost of the closure of the yard.
As regards the consequences for British Shipbuilders, the EFL of £158 million was set before the problems at Scott Lithgow had become apparent and at a time when British Shipbuilders expected a number of new orders. The

disposal of Scott Lithgow gives rise to costs of £88 million this year. In addition, the continued recession in merchant shipbuilding has led to a fall on that side and a further increase of £22 million in British Shipbuilders' financial requirements. The result is that a total of £268 million will be required this year. But I emphasise to my hon. Friend that the costs of this deal are broadly the same as they would have been if closure of the yard had occurred.

Dr. Norman A. Godman: Naturally, I am absolutely delighted that the threat of closure of Scott Lithgow has been lifted. It has been, of course, of deep concern to me ever since I became a Member of the House. In fact, a shop steward at John G. Kincaid said to me recently, "You are not the Member for Greenock and Port Glasgow; you are the Member for Scott Lithgow." Does the Minister agree that, in spite of the ill-founded criticism of the work force and management at Scott Lithgow, Scott Lithgow now forms part of a first class offshore engineering industry? Will he give his support to his ministerial colleagues at the Department of Energy in bringing home that fact to those who operate and those who seek to operate the offshore oil and gas industry? Will he seek to avoid a repetition of the decision made by Sun Oil to dishonour its obligations to this country in placing an order with a Swedish company?

Mr. Lamont: My right hon. Friend the Minister of State, Department of Energy, has already made clear the Government's views on the Sun Oil contract and our regret at the outcome of that decision. I am grateful for the way in which the hon. Gentleman has responded to today's announcement. I might add that there is a possibility of Howard Doris's still being involved. It will be giving technical support — that is the precise form of its involvement. I agree with the hon. Gentleman that this should be a winning team and a new start.

Mr. Michael Hirst: Is my hon. Friend aware that today's news will be widely welcomed in Scotland, not least by the many small businesses which are suppliers of Scott Lithgow? Will he take this opportunity of reminding the Scottish people, the Scottish media and, indeed, the Opposition that it was a Conservative Government and Conservative Ministers who made the resources available to bring about the rescue of this enterprise and the promotion of the joint venture by Trafalgar House and Howard Doris in Greenock? Does my hon. Friend agree with me that the verdict on this issue is that state control has been ruinously disastrous for Scott Lithgow?

Mr. Lamont: I am grateful to my hon. Friend. I would only add that I believe that there is no industry in which privatisation can do more good than in shipbuilding.

Mr. Gordon Wilson: Will the Minister accept the thanks of my right hon. Friend the Member for Western Isles (Mr. Stewart) and myself for his willingness to change his original verdict on this yard, which was one of closure, and to enter into the negotiations which have proved to be so successful? In view of the valuable real estate along the dockside and Trafalgar House's interest in property development, how much weight have the Government placed upon the long-term future of the yard in seeking further orders? Since one of the problems of the yard in the past was long-distance management, will the


hon. Gentleman say what steps have been taken to ensure that there will be good, strong, locally based management with power to take decisions?

Mr. Lamont: The hon. Gentleman must not misrepresent the position. We have not altered our verdict, as he put it. We felt that the taxpayer could not be expected to inject further sums of money on top of the huge sums that had already been put into Scott Lithgow. That position has been maintained, because no extra costs to the Government are involved as a result of this deal compared with the option of closure.
The hon. Gentleman referred to Trafalgar House and its property activities. He will be aware that Trafalgar House is the largest metal fabricator in western Europe. It has substantial offshore interests and it is already heavily involved in the North sea. There is no reason to doubt its immense management capability in this field, and it is taking on a very difficult task.

Mr. John Corrie: May I thank my hon. Friend for his statement, particularly on behalf of those in the west of Scotland? Does he know whether all the land will be required for the new company or whether there is any likelihood that land could be released for new industry to come into the area? One of the major problems is that very little land is being made available.

Mr. Lamont: There could well be some surplus land. Discussions are taking place with the Scottish Development Agency about how that land might be made available for other uses.

Mr. Bruce Millan: I very much welcome the fact that work is to continue at Scott Lithgow, but is it not clear from the figures that the Minister has given that it is an expensive takeover? The real comparison is not with the cost of closure, but with the renegotiated contract between Britoil and British Shipbuilders. If Ministers had exerted themselves in good time, we would have not only a continuation of work at Scott Lithgow and at British Shipbuilders, but much less cost to the taxpayer.

Mr. Lamont: What have been skyscrapingly expensive are the losses incurred in the past by Scott Lithgow. We have followed the advice of British Shipbuilders that it would have been wrong and much more expensive to renegotiate the original contract and bail out the yard. This is the best deal for the taxpayer and for employment on the Clyde.

Mr. Michael Forsyth: Does my hon. Friend agree that this is one in the eye for Labour Members who saw nothing but further state spending for the future of Scott Lithgow? The fact that 2,500 jobs have been saved, that there is an end to the haemorrhaging of taxpayers' money and that the future looks bright, show that this is a triumph of privatisation in practice.

Mr. Lamont: I entirely agree with my hon. Friend. If I had been told some months ago that Scott Lithgow would be the first part of British Shipbuilders to be privatised, I would scarcely have believed it. This is the working of market forces, and the solution is in the interests of our taxpayers and our industry.

Mr. Malcolm Bruce: Will the Minister accept that my colleagues and I very much welcome the fact that the yard has been saved from possible closure?

However, as other hon. Members have said, some points of concern arise. It appears that the contribution by the consortium led by Trafalgar House is to be £12 million spread over three years, but the taxpayer has to pay £268 million in one year.
The Minister referred to the possibility of the Scottish Development Agency taking an interest in the land. Are we to assume that Trafalgar House, which has more of a reputation as a property company than as a manufacturer of sophisticated offshore equipment, will be able to make a profit from the sale of real estate to the SDA?

Mr. Lamont: The hon. Gentleman misses the point. The costs to the Government are unavoidable. Because of past losses, the Government unfortunately have no alternative but to pay a large bill. But the deal is a good one and the best available for the taxpayer. I have already said that Trafalgar House is interested in the deal because of its interest in the operations of the offshore industry. It is not interested in the arrangement as a property deal. The SDA will be handling the development of surplus land.

Mr. Gerald Malone: Does my hon. Friend agree that one of the most important aspects of the arrangement is that the yard now has some credibility? Does he also agree that, at a time when there is to be exploration in wilder waters off the west coast of Scotland, it is important that we have a lead in the high technology involved? Is it not absurd that there still appear to be some Labour Members who think that Scott Lithgow had any credibility left?

Mr. Lamont: My hon. Friend is obviously right. In addition to Howard Doris giving technical support, the Swedish company, Gotaverken Arendal, will be involved. Between them, the three companies have immense resources and experience and have achieved great success. That must give hope for the future.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that a private notice question is an extension of Question Time.

Mr. Harry Ewing: Does the Minister accept that it is particularly appropriate that he should be forced to make a statement today because of his uncompromising and hard speech in the debate on Scott Lithgow, when he said that he would do nothing to help the yard? It is appropriate that he should be made to eat his words today.
Is the Minister aware that we strongly deprecate the way in which this matter has been handled today, with the planting of a private notice question by the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley), who does not represent Scott Lithgow, and who did not even have the good manners to tell my hon. Friend the Member for Greenock and Port Glasgow(Dr. Godman) that she had tabled this question?
Will the Minister accept that we regret—I want to make this clear—the loss to the public sector of this yard, which was involved in the most advanced technology in the construction of semi-submersible rigs? However, we welcome the fact that the yard is to be saved. Far from that being a victory for the Minister or his right hon. Friends, it is a famous victory for the people of Greenock and Port Glasgow and for the work force of Scott Lithgow. Will the hon. Gentleman join me in paying tribute to my hon. Friend the Member for Greenock and


Port Glasgow, who has worked tirelessly on this matter and has at long last removed the stigma from the work force in Scott Lithgow which was placed upon it by the Secretary of State for Scotland when he described the workers as no better than coolies from the Korean rice fields?
Will the Minister also join in a tribute to the churches, to the community and everyone involved in this campaign? Does he agree that this is a lesson to every community in Britain that when its industrial livelihood is threatened it should fight the Government to save its industry?

Mr. Lamont: The hon. Gentleman congratulated everyone under the sun and wanted me to congratulate them as well. The only thing that he was not prepared to say a good word about was Trafalgar House, which is prepared to take on the yard at great risk.
The hon. Gentleman said that I had said that I would do nothing to help the yard. He confuses doing something with spending more money. We said that we would not be prepared, with a yard with such a damaging record of huge losses, to go on pouring in taxpayers' money; we had come to the end of the road. Despite not having to put in more money, we have managed to salvage something out of the wreckage and to create an entity that will, we believe, be a strong company in the offshore industry.

Mr. Hugh Brown: On a point of order, Mr. Speaker. I wish to raise a question about the practice relating to private notice questions. I am aware that it is in your discretion to decide whether the subject is a matter of urgency or national importance. However, it seems to me that it places you, and therefore the House, in an impossible position when a request is made to you that is legitimate—never mind whether it is from the appropriate Member or not—but it is obvious from the interest in the House that the subject merited a statement. In the interests of the House, this is a legitimate question. Can you confirm that there was no request from the Government to make a statement? I understand that the Government decide whether there will be a statement. In the light of what has happened today, will you, Mr. Speaker, deprecate any attempt to use the private notice question procedure for something that has been connived at by the Government?

Mr. Speaker: Order. I know nothing about the last point. I can confirm that no application was made by the Government to make a statement on this matter, although a statement is to be made by the Foreign Secretary shortly. I applied the same criteria to this application as I apply to every other. I hope that the House will agree that the interest that has been shown fully justified my judgment.

Mr. Bill Walker: On a point of order, Mr. Speaker. I seek your guidance. Is it in order for an hon. Member to put forward a private notice question that is of substantial constituency interest and of national interest, as is the case with Scott Lithgow—

Mr. Speaker: Order. It is in order for any hon. Member to put forward a private notice question. I apply the same rules to every private notice question, irrespective of from which side of the House it comes, whether it is of constituency interest or not.

Mr. Harry Ewing: Further to that point of order, Mr. Speaker. In this instance, Scott Lithgow lies wholly within the constituency represented by my hon. Friend the Member for Greenock and Port Glasgow Dr. Godman). My hon. Friend the Member for Greenock and Port Glasgow has led the fight to save Scott Lithgow. The hon. Member for Renfrew, West and Inverclyde>(Mrs. McCurley) has no direct constituency interest in Scott Lithgow. Many hon. Members representing the west of Scotland have constituents who work in Scott Lithgow, but the establishment is wholly within the constituency represented by my hon. Friend the Member for Greenock and Port Glasgow. I made the point that the hon. Lady did not have the good manners to give my hon. Friend notice that she had tabled a question.
Would you, Mr. Speaker, give the House guidance about the practice of an hon. Member tabling a private notice question that concerns the constituencies of other hon. Members and not having the manners to inform those hon. Members that such a question has been tabled?

Mr. Speaker: Order. It is a well-known convention of the House that, if hon. Members table questions concerning other hon. Members' constituencies, they should so inform those hon. Members. As to the hon. Member for Renfrew West and Inverclyde (Mrs. McCurley), the House will be well aware that I keep careful note of hon. Members who are interested in any particular subject, and I know well, from the many occasions on which questions on this matter have been tabled that she has always risen to ask a question.

Questions to Ministers

Mr. Barry Porter: On a point of order, Mr. Speaker. I shall keep this point of order short, Mr. Speaker, because I have to go to a meeting of the parliamentary solicitors group.

Mr. Speaker: Order. The House is waiting to debate a very important Bill under the guillotine, so if the hon. Gentleman's point of order is not very important, and if he has to go to another meeting, perhaps he will make it a short one.

Mr. Porter: I shall try, Mr. Speaker. Earlier in Question time, a very important matter was raised about the simplification — allegedly cheapening — of house transfer, on which you allowed one supplementary question. That is a matter of enormous importance to millions of people.

Mr. Speaker: Order. The hon. Gentleman is now seeking to query the hon. Members whom I called to speak on an earlier question. I am sorry that I did not manage to call the hon. Gentleman, but I do my best to accommodate as many hon. Members as possible.

Foreign Affairs Council

The Secretary of State for Foreign and Commonwealth Affairs(Sir Geoffrey Howe): With permission, Mr. Speaker, I should like to make a statement about the Foreign Affairs Council which met in Brussels on 27 March.
The main purpose of the Council was to review the position following last week's European Council and to see if further progress could be made on the remaining areas of disagreement. Ministers also had a short discussion of political co-operation issues, and approved four declarations prepared during the European Council on 19 to 20 March. These declarations relate to East-West relations, the middle east, Latin America and Cyprus. I am arranging for copies to be placed in the Library of the House.
On the main question, most of yesterday's meeting was devoted to the issue of budget burdens. The basis for our discussion at this meeting was that there should be only one more year of ad hoc refunds covering 1984, to be followed by the introduction thereafter of a lasting system for a fair sharing of the budget burden.
It did not, however, prove possible to reach agreement on the figure that would be the basis for such a system. This figure is of greater significance than is implied by the crude size of the gap between the figure of 1,000 mecu —£590 million—which is being proposed to us, and the figure of 1,250 mecu—£737 million—which my right hon. Friend indicated at the European Council that we would be ready to accept. Since this is the starting point for a durable system, and not just a figure for one or two years, it is important to get it right at the outset. Further work will now be set in hand. Foreign Ministers will take up the issue again at our meeting on 9 April.
The regulations covering our outstanding refunds for 1983 remain blocked. I have made clear to our partners that this is unjustified and misconceived.
As the House knows, the Commission has made a request for an advance payment of the own resources due in April. The principal justification for that advance was to provide for the payment of United Kingdom and German refunds by the end of March. Since those refunds remain blocked, the case for the advances can no longer be sustained. We shall not, therefore, ask the House to approve the Supplementary Estimate for the advance payment that the Commission requested for 30 March.
I do not need to remind the House that one of the main issues in the negotiations has been the proposal by other member states and the Commission to change the basic decision under which the Community is financed by increasing the VAT ceiling. That proposal requires the unanimous consent of member states and national Parliaments. The Government have indicated their willingness to entertain that proposal, but only if there is effective control of Community spending and a fair sharing of the budgetary burden. Both those conditions remain crucial.
It is bound to be difficult to reach agreement on fundamental reforms of the sort now under discussion. The decisions will determine the future of the Community for a considerable number of years ahead. It is for that reason that the Government believe that it is in our interest to take no action that might damage the prospects of decisive

progress. We shall continue to work constructively for a settlement of the negotiations on a basis acceptable to the Government and to this House.

Mr. Robin Cook: The House will be grateful to the Foreign Secretary for his statement on how he has discharged the Prime Minister's instructions. As we have not been favoured with a similar statement from the Minister of Agriculture, Fisheries and Food, will the right hon. and learned Gentleman say whether any items have been agreed in the Agriculture Council meeting? If not, how does he hope to pretend to the House that we are making progress towards controlling the agriculture expenditure of the Community? Have the Government shown any willingness to accept the removal of the beef premium, which would add 7p to the price of a pound of beef in the shops?
The right hon. and learned Gentleman referred to the Government's willingness to entertain an increase in own resources if certain conditions were met. Is that not a shift from their previous view, which was that they would be willing to entertain such a proposal on its merits if the conditions were met? Is the right hon. and learned Gentleman now telling the House that the Government have no view on the merits of an increase in own resources? Is he willing to surrender that simply as a bargaining chip in the process of negotiation? If so, has not he noticed that the formula agreed on own resources at the summit last week would result in an increased VAT payment by Britain of £700 million in 1986 and £1,000 million in 1988?
Has the right hon. and learned Gentleman failed to grasp that those sums are larger than the sum on which he has failed to get agreement for the British rebate? What possible evidence does he draw from the past two weeks to show that if the increase in money was made available to the EC it would not be squandered on even larger farm surpluses?
The statement referred to the withdrawal of the advance payment due this week. Does not the right hon. and learned Gentleman appreciate that that is the most limpwristed gesture that he could have found? As he stated, it is an advance on the April payment. Will he confirm that the April payment is due on the first banking day in April—that is, next Monday? Is he not withholding payment this week to pay it on Monday? Which of our continental partners are supposed to be impressed with that negotiating tactic?
Does the right hon. and learned Gentleman remember that only three weeks ago he advised me that it was unreasonable to speculate that the rebate would not be paid by 31 March? Does he still take that view? Has he the faintest hope that the 1983 rebate will be paid by Saturday? If not, what will he do about it? Has he forgotten that on the Sunday before the summit he said that if the rebate was not paid by 31 March it would be necessary to safeguard our position? When will he safeguard the British position? If the right hon. and learned Gentleman is afraid of the right hon. Member for Old Bexley and Sidcup (Mr. Heath) being unimpressed by and not in favour of such action, I assure him that he will have the united support of Members on the Labour Benches for the just and necessary measure of withholding from our 1984 contribution the rebate that he has failed to obtain for 1983.

Sir Geoffrey Howe: The Agriculture Council met on Monday and Tuesday of this week. It adjourned to resume


its meeting on Friday and, if necessary, Saturday of this week. All the issues already before it remain for further discussion. In particular, the question of the beef premium was raised and was emphasised as a matter of importance by my right hon. Friend the Minister of Agriculture.
On own resources, the hon. Gentleman does not understand two things that the proposal for an increase in own resources in 1986 is one thing, and that the proposal for a possible further increase in own resources in 1988 is another quite separate thing. Each of those would require separate consideration by the Council, a separate unanimous vote by the Council, and separate approval by this House. Of course, the figures involved in an increase in own resources, even on the first step to 1·4 per cent., would involve a substantial transfer of resources from this country. That is why we are seeking an adjustment of the budgetary burdens to ensure that we are protected from the full impact of that increase. That is why our position remains exactly the same. The Government have indicated their willingness to entertain that proposal, but only if there is effective control of Community spending and a fair sharing of the budgetary burden. I emphasise that both conditions remain crucial.
In answer to what the hon. Gentleman said about withdrawal of the Supplementary Estimate that was before the House, that Estimate related to an advance of payments by one month from 20 April. There is now no need for that to take place.
We intend to safeguard United Kingdom interests in all respects through these negotiations. One of those interests is to achieve the right outcome of the negotiations. I shall not be guided in our assessment of the best way of achieving that by the prospect of uniting the Labour party.

Mr. Julian Amery: Is my right hon. and learned Friend aware that this is no time, when negotiations are so close, for back-seat or Back-Bench driving? Is he further aware that he has achieved a great deal more than any of us expected? [HON. MEMBERS: "Oh."] I accept that brinkmanship is the essence of all negotiations, but does my right hon. and learned Friend agree that there is a difference between brinkmanship with adversaries and brinkmanship with friends?

Sir Geoffrey Howe: The important feature of the negotiations is that they are taking place with the other member states of the Community, with whom we have been in partnership since we joined the Community, and with which we shall remain in partnership hereafter. In the course of the negotiations, as in any other negotiations, differences of position appear, and sometimes those differences are sharp. However, we are determined to continue to work for decisive progress towards and eventually agreement on the content of the Stuggart agenda. Throughout the negotiations, we are and have been flexible where that is right, we are robust where that is right, and throughout we are honourable as well.

Mr. J. Enoch Powell: Does the Foreign Secretary recall that, when Britain joined the Common Market, the people of this country were told that parliamentary sovereignty remained intact and that it could be reasserted at any time? Will the right hon. and learned Gentleman guarantee that it will be used as and when it is necessary to secure this country's rights?

Sir Geoffrey Howe: Parliamentary sovereignty is exercised in accordance with the treaties that this House has endorsed. The right hon. Gentleman will remember that the treaties involving our accession to the European Community were the subject of endorsement and legislation in the House. Any change following these negotiations involving an increase in own resources will similarly require the approval of this House.

Mr. David Crouch: When my right hon. and learned Friend considers the question of the sovereignty of this House, will he bear in mind that behind him on these Benches, as well as on the Opposition Benches—certainly on the alliance Benches—there are many hon. Members who are wholeheartedly in favour of our making a success of Europe and our participation in the Community, and that it is not just a question of making a success of the cost of our membership? Will he bear that thought in mind as he seeks to find a solution to the present crisis?

Sir Geoffrey Howe: I entirely agree with my hon. Friend. The majority of Members in this House and in the country, as was shown in the last election, want our membership of the European Community to continue and to be successful. In that respect, it is important at this critical stage to achieve the right outcome to the negotiations, because they make fundamental changes in the financing arrangements of the Community. The issues are bound to be intractable, and we are therefore bound to take some time to reach the right conclusions. However, I have no doubt that I have the support of the whole House in seeking to achieve the right outcome.

Mr. Bryan Gould: Will the Foreign Secretary make it clear that any decision to safeguard our interests by withholding payments is, as a matter of domestic law and as a matter of the constitution, entirely for this House, and that it is entirely within its competence to take that decision?

Sir Geoffrey Howe: The way in which the House exercises its competence must always have regard to our international obligations.

Mr. Anthony Beaumont-Dark: Does my right hon. and learned Friend accept that many of us feel that Brussels has spawned an organisation that has redistributed wealth from the consumer to the farmer, and often from poorer countries to richer countries? Does he accept that Her Majesty's Government deserve all the support they can get in stopping this insanity so that we may have a long-term Common Market that will not be a bloodsucker on the backs of the British taxpayer?

Sir Geoffrey Howe: I am not sure that I wholly share my hon. Friend's view of the Community. His question relates to two critical problems for the Community. In every developed country the problem of reconciling the interests of the agricultural community with those of the rest of the community is formidably difficult. The changes that are now in prospect are likely to involve difficulties and sacrifices for the farming community throughout Europe. It is important for us to press ahead to the right conclusions, which must be compatible with effective control of Community expenditure.
The need to ensure that the distribution of resources within the Community has regard to relative wealth and


ability to pay is no less important. The gap between the figures of 1,000 million ecu and 1,250 million ecu is already substantial for the United Kingdom, but in terms of the cost to other member states the gap is relatively small when divided between eight or nine contributors. I therefore regret that, so far, our partners have been unable to take on the small additional burden to bridge that gap.

Mr. Roy Jenkins: Does the Foreign Secretary appreciate that if he continues to take the Prime Minister's instructions, to use her word of yesterday — a rather odd word — about her Foreign Secretary, not to negotiate, he is unlikely to achieve a negotiated settlement? Will he tell us whether any of our recent traditional supporters on the issue—the Dutch or the Italians, or anyone else — were still on our side yesterday?

Sir Geoffrey Howe: In all the negotiations, including those that took place yesterday, a number of our partners were prepared to take positions that were helpful to our own. In the negotiations, which are clearly crucial to the Government and to the country, the position that we take is a matter of consultation between my right hon. Friend and myself and other senior Ministers, frequently and as appropriate. It would be quite wrong to believe that we do not approach the matter with flexibility.
I fully understand the need for us to demonstrate that we are searching for an agreement, but it should not be forgotten that during the negotiations last week, when most of the discussion took place about the size of the gap, we agreed to work on the basis of the VAT expenditure gap rather than the own resources gap. Again on the figures last week, we moved on more than one occasion to arrive at the figure of 1,250 million ecu. So there has been flexibility at different stages, and on both sides of the negotiations. It remains crucial to reach a conclusion that is a basis for a durable system. It must be looked at, not just as a figure for one year, but as the foundation for a system that will last and grow for many years.

Several Hon. Members: rose—

Mr. Speaker: Order, I appreciate the importance of the subject of the statement, but the House will know that we have to consider a Report stage today under the guillotine, a ten-minute Bill and an application under Standing Order No. 10. Therefore, I am afraid that I can allow questions on the statement to run for only a further 10 minutes.

Mr. Teddy Taylor: I applaud my right hon. and learned Friend for not accepting the deal on offer, but is not there a danger that we might already have gone too far in pledging ourselves to spend several hundred millions of pounds a year on top of a net contribution to date of £5,000 million? Does my right hon. and learned Friend agree that, when we have just heard that the Common Market is now exporting six times as much cheap food to Russia as in 1979 at the rate of 100,000 tonnes a week, it is rather silly for it to ask for more resources without cutting down on its waste and extravagance?

Sir Geoffrey Howe: My hon. Friend is directing attention to a crucial point in the negotiations. The way in which the common agricultural policy has developed over the years has generated growing surpluses and expenditure. If that process is to be halted and reversed, as is now happening, it is bound to be of great discomfort

to all sides of the Community. That is the process to which we are now applying ourselves with great energy and vigour.

Mr. Roland Boyes: Will the Foreign Secretary assure the House that, when he said that the Government had shown their willingness to entertain that proposal "only if," the ifs included cash to offset the social consequences of unemployment, an acceptance of the Vredeling proposals for greater industrial democracy, but, above all, cash to get Europe going again so that the 15 million people who are out of work have a chance to find work and the 35 million people living in poverty and squalor have an opportunity to get out of it?

Sir Geoffrey Howe: We are not, as I have said on several occasions, disposed to look favourably on the Vredeling proposals. In our judgment, they go too far in the direction of legislative and bureaucratic intervention. Of course, our negotiations with the Community and our conduct of Community policy is directed to the reduction of unemployment and the improvement of economic performance in the Community. But in Europe, as in the United Kingdom, it is not necessarily the right way to achieve those ends simply to throw more money at them.

Sir David Price: How far have my right hon. and learned Friend and my right hon. Friend the Prime Minister raised with their colleagues in the Council of Ministers the important fact that the non-tariff barriers to trade produce enormous economic disbenefit in trying to produce a common market and that if they are removed there will be more than enough economic growth to take care of all that we and everyone else are asking for?

Sir Geoffrey Howe: That is one of the matters that has been at the heart of our proposals for new policies which were under consideration at last week's European Council. I am glad to say that some progress is being made towards the adoption of more common policies to remove such barriers. I refer in particular to proposals for the adoption of common standards which are likely to move forward as a result of last week's discussion, proposals for the removal of barriers to road haulage traffic within the Community, and proposals for improvements in the insurance industry.

Mr. Eric Deakins: Has the system for effective control of Community expenditure yet been agreed ? Is it part of the right hon and learned Gentleman's negotiating stance that this must be embodied in the budgetary procedures of the Community and, if so, will he give us some idea how that is to be done?

Sir Geoffrey Howe: The proposals for more effective control of agricultural expenditure and Community expenditure generally formed a large part of the discussions last week. We have gone a long way towards reaching conclusions about that. All those conclusions depend upon each other before they are adopted. There are steps set out in the draft conclusions which would have the effect of achieving that control, the last paragraph of which says that the Council of Minister will bring forward proposals for guaranteeing the effective application of the principles set out in the text of the conclusions. The Council of Ministers will now be getting down to that work.

Mr. Nicholas Lyell (Mid-Bedfordshire): Will my right hon. and learned Friend remind the House that our trump card in the negotiations is our ability to prevent any increase in own resources? Will he remind the Labour party that its siren invitation to go down the road of breaking treaty obligations is unlikely to improve Britain's position?

Sir Geoffrey Howe: I am not likely to be beguiled by invitations of any kind from the Labour party. My hon. and learned Friend's point is of great importance. A number of other member states in the Community are proposing an increase in own resources. Such an increase would require approval by every member of the Council of Ministers and by every national Parliament. It is only if agreement is reached on all the other components of the Stuttgart package, including the two to which I have already drawn attention — effective control of Community expenditure and a fairer distribution of budgetary burdens—that there can be agreement on a decision to increase own resources.

Mr. Dennis Skinner: Is the Foreign Secretary aware that there is a general view abroad in the country, and perhaps to some extent in the House, that the Prime Minister and her pupil the Foreign Secretary are doing a bit of electioneering before 14 June, after which the Iron Lady will pay the brass? Will he bear in mind that we are now reaching the stage where, thankfully, the British people understand that the Common Market has reached crisis proportions? We do not need a master of detail to try to get us out of it. It is now a question of principle.
The Labour party has not changed its anti-Market attitude at all. It announced unanimously today at the national executive committee meeting that the only way to deal with the problem is not to hand over the money and to make the necessary plans to get out of the Common Market once and for all, which will suit a great proportion of the British people.

Sir Geoffrey Howe: One is grateful for advice about the attitude of the Labour party towards the European Community from almost any quarter, but I am not prepared to accept advice on behalf of Her Majesty's Government from the hon. Gentleman, whose contributions to these discussions represent an almost unique cocktail of insult and unwisdom.

Sir Anthony Meyer: Is my right hon. and learned Friend aware that he used the words "the main question" to describe the long drawn-out process of waiting for the other nine to accept the British point of view? He used that expression at a time when the voice of Europe is quite silent on issues such as East-West relations and in particular, on the opportunities which now seem to be opening up in the middle east. Has something gone wrong?

Sir Geoffrey Howe: I appreciate the importance that my hon. Friend attaches, as do I, to reaching the point where the Community can effectively play a much fuller part in all the other questions with which the Council of Ministers and the Foreign Affairs Council should be concerned. However, it has been for some months, and is still, engaged in negotiations about the future shape of the Community that are of crucial importance. As I said in my statement, having touched briefly on the political topics,

we had a great deal of discussion on the main question of the negotiations yesterday. At present there can be no doubt that the resolution of the Stuttgart agenda is the main question before the Community. It is of great importance. It should be resolved in a fashion acceptable to all member states as soon as possible. Then, I entirely agree with my hon. Friend, we can get on with further and even more important business.

Mr. David Penhaligon: Will the Foreign Secretary confirm that the British Government have reduced production of milk in Britain—which is less than self-sufficient in milk production—by three times as much as France which is largely responsible for producing the surplus? What will be the cost of that remarkable reduction by the British Government to the British farmer? Just what arrangements are to be made for implementing that measure, which can only result in the reduction of a large swathe of our prosperous agriculture industry?

Sir Geoffrey Howe: As the Foreign Secretary, I am answering questions on the proceedings of the Foreign Affairs Council. I appreciate the importance of the hon. Gentleman's point on agriculture, particularly about milk production. As I have said already, the process of checking the growth of the mountains of butter and lakes of milk is a profoundly uncomfortable one. The pace at which that takes place is related to a number of factors, including the rate and scale of growth in different member states during recent years. Conclusions on that matter have not yet been arrived at. The hon. Gentleman will have the opportunity to ask questions of my right hon. Friend the Minister of Agriculture, Fisheries and Food in due course.

Mr. Nicholas Winterton: Is my right hon. and learned Friend aware that those of us who believe in justice and in playing by the correct rules expect the refund due to the United Kingdom to be paid by the appropriate date, which is 31 March, which happens by chance to be my birthday? Is he further aware that the British livestock and dairy sector is not prepared to accept the responsibility placed on it by the inaction and irresponsibility of successive Governments? Will he respond more directly to the question asked by the hon. Member for Truro (Mr. Penhaligon?

Sir Geoffrey Howe: I responded plainly to that and I cannot move into a different position. The British livestock and dairy industry, like the livestock and dairy industries of other Community countries, is bound to face the prospect of uncomfortable change if the runaway cost of the common agricultural policy is to be checked and halted.

Mr. Winterton: We are not producing the surpluses.

Sir Geoffrey Howe: The way in which that is dealt with is, of course, a matter for extended debate with the Minister of Agriculture, Fisheries and Food and is not for debate now.
The answer to the first point raised by my hon. Friend is that the decision taken to delay the payment of our refund beyond the end of this month is, as I have said, unjustified and misconceived.

Several Hon. Members: rose—

Mr. Speaker: Order. I gather that no Opposition Front Bench Member desires to put a question on this subject, so I shall call one more Member from the Opposition Back Benches.

Mr. Kevin Barron: What has been the biggest single issue in the last fortnight to have made the British Government capitulate over the payment of the refund? Is it not a fact that in the last two months the Government appear to have been banging a big drum but now find that they cannot deliver?

Sir Geoffrey Howe: No, Sir. Throughout these matters, as I said, we are determined to safeguard British interests in the most effective way. One of those important British interests is the interest of the Community in arriving at a conclusion to these negotiations that is acceptable to ourselves and to other member states.

Mining Dispute(Police Conduct)

Mr. Tony Benn: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the conduct of the police in the present mining dispute'".
I have received reports from the Derbyshire area of the NUM that the police have set up road blocks on roads in the area, have arrested about 40 miners who were driving vehicles miles from the collieries, have impounded their vehicles and have compelled other passengers to abandon their vehicles.
Since I spoke to you this morning, Mr. Speaker, I now understand that miners are being prevented from the peaceful picketing of the pits—[Interruption]—in which they work, as at the Shirebrook colliery; that police snatch squads are being used to attack miners outside the collieries; and that others travelling to work, who have no connection whatever with the mining industry, have been hauled from their cars by the police.
This situation is specific. It is also urgent, and it is clearly a matter of public importance for several reasons.
First, the mining industry is central to the British economy and to the communities which would be devastated by proposed closures. The present dispute is already affecting the steel industry, and other coal supplies are involved; and the responsibility in this respect is a ministerial one. The problem of closures cannot be resolved by the police, behind whom the Home Secretary is hiding.
Secondly, the police action has no statutory backing, and by establishing road blocks the police are anticipating legal powers proposed in the current Police and Criminal Evidence Bill, which has not yet been approved or passed by Parliament and is not the law of the land.
Thirdly, the national executive committee of the Labour party this morning unanimously passed a resolution supporting the miners and expressing concern at police operations as being a serious breach of traditional practices.
Fourthly, Ministers are seeking to present this as a matter of law and order, yet the House of Commons has not discussed the situation, an omission which itself is worsening the atmosphere because it appears that Parliament is not interested in the industry, in the dispute or in the maintenance of civil liberties.
For those reasons, I submit that you should give priority to this matter, Mr. Speaker, so that the House can hold an emergency debate under the Standing Order which is designed precisely to cover such a situation.
Later tonight there will be a debate on two orders concerned with miners' redundancy and concessionary coal. I considered carefully whether that would be an appropriate time at which to raise these matters. However, as these issues concern law and order and the police, it would be wrong for the urgency of this subject to be dealt with at a time when the House will be discussing separate and largely non-controversial matters.

Mr. Speaker: The right hon. Member for Chesterfield(Mr. Benn) asks leave to move the Adjournment of the


House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the conduct of the police in the present mining dispute".
I do not in any way underestimate the importance of the dispute which, sadly, is currently taking place. Having listened carefully to what the right hon. Member said, I regret to say that I do not consider the matter that he has raised to be appropriate for discussion under Standing Order No. 10, and I cannot, therefore, submit his application to the House.

Mineworkers (Debate on Orders)

Mr. Dennis Skinner: On a point of order, Mr. Speaker. In the debates that will take place tonight on two orders, in particular with regard to redundancy payments, may I remind you that a study of Hansard shows that on all occasions when such instruments have been debated hon. Members have been permitted to discuss the alternatives on which the money in question — tonight it will be redundancy money—could have been used?
So far as I can recollect, there has never been an occasion when Mr. Speaker or his deputy has intervened to say that hon. Members could not debate the issues for which the money was to be used or for which it could be used. I hope, therefore, that there will not be any restriction on hon. Members who wish to take part in tonight's debate, should they wish to refer to current matters arising out of the fact that not so much money would have to be made available by way of redundancy payments if there were fewer pit closures. In other words, I hope that we shall tonight be able to refer, as we have in the past, to such other matters.

Mr. Speaker: I fully understand what the hon. Gentleman says. As for tonight's debate, hon. Members will have seen the motions on the Order Paper and will appreciate that we must stick to the subject matter of those motions, otherwise order will completely evaporate. Nevertheless, in my judgment it can be a fairly wide debate, and the matters to which the hon. Member referred may certainly be mentioned in the debate.
The House will be aware there will tonight be two one-and-a-half hour debates, so that there will, in effect, be a three-hour debate. While, therefore, I reaffirm what the hon. Member for Bolsover(Mr. Skinner) said in the substance of his remarks, it would not be in order to discuss what the police are alleged to be doing and what the right hon. Member for Chesterfield(Mr. Benn) raised in his Standing Order No. 10 application.

BUSINESS OF THE HOUSE

Ordered
That notwithstanding the provisions of paragraph(1) (b) of Standing Order No. 3 (Exempted Business) the Motions relating to the Coal Industry may be proceeded with, though opposed, for three hours after the first Motion has been entered upon, and Mr. Speaker shall then put any Questions necessary to dispose of proceedings on those Motions, if not previously concluded.—[Mr. Douglas Hogg.]

Polygraph Registration and Control

Mr. Merlyn Rees: I beg to move,
That leave be given to bring in a Bill to establish a polygraph registration and calibration organisation with powers to license all polygraphs used in both the public and private sectors subject to certain exceptions; to establish a Commission of Members of the House of Commons serviced by an Office of Technology Assessment to oversee the use of such polygraphs in the public sector; and for connected purposes.
I raise the issue of the so-called lie detector now for two reasons. First, an experiment is about to take place at GCHQ Cheltenham with the use of a lie detector "for counter-intelligence examinations only," according to the Security Commission, and machines have been imported for that purpose.
Secondly, the use of the lie detector in the private sector is growing, with the setting up of a company or companies—I understand that one has been set up with a former chief constable on the board—to detect not spies but possible thieves in retailing, catering, jewellery and security companies, and that machines are being imported for that purpose. The growing use of the polygraph in the private and public sectors has implications for the individual citizen, especially if its use moves into the criminal justice system. This is an important issue on which Parliament should deliberate, give its view and legislate.
The machines attempt to detect anxiety, fear and anger by measuring blood pressure and skin conductivity. The measurements produce lines on a chart, as the polygrapher asks questions. The machines may have a use in measuring those items, but I have grave doubts about using pseudoscientific techniques to detect past, present or future criminals.
As a start, Parliament, through a Select Committee, should take evidence and assess the worth of these machines. I use the word "Commission" in the Bill because I was advised that it was not correct to use the words 'Select Committee". I use the phrase "Office of Technology Assessment" simply because I took it from the name of the unit that works for a congressional committee. Its research has been valuable in my work in the past two or three weeks. The name is not appropriate here, but a similar professional organisation will be necessary.
I have never argued, and I do not argue now, that Parliament should govern, but a judgment on the polygraph following evaluation is a proper exercise of our parliamentary functions. Our view is better than that of Government Departments or agencies, especially as our job is to protect the rights of the individual. Because these machines may be used in the private sector, I have included a section that sets up a polygraph registration and calibration organisation. Frankly, this is a cockshy approach to find a suitable method of control, but we certainly need further discussion. The machines are being used in the private sector in a most important area, and there should he a means of checking their accuracy.
I shall refer to security. Research shows that it is easy to train a subject to cover the fact that he is lying—for example, a pen held in the palm of the hand and pressed into the skin at an appropriate moment will cause the machine not to work properly. The machine's purpose will also be defeated if a person focuses his thoughts elsewhere in a yoga-type meditation. One piece of research said, on the same theme, that the machine's role would be defeated if a person concentrated his thoughts on sex. That leads me to observe that, if an antidote is not provided, some newspaper editors will be immune for life.
The danger of receiving a pass mark from the machine is that it could lead positive vetters away from a present or future spy. Of course, mistakes in positive vetting are made, but polygraphs are not a way out.
The machines could be used to frighten. The Oval Office tape of 14 July 1971 reveals that President Nixon, when advised that these machines were inaccurate, answered,
Listen, I don't know how accurate they are but I know they will scare the hell out of people.
There will be exceptions. I understand—provision is made for this in the Bill — that valuable medical research is done, for example, in Edinburgh, on the use of this machine to measure stress, and so on, but not to detect lies. Pressure has been put on me to arrange for a schedule that will exempt from being investigated by a lie detector anyone who has served in a Whip's office, and I have promised to do that.
My overall view of the polygraph is expressed in the words of David Lykken of the University of Minnesota, who advises Congress. He said:
The polygraph ('lie-detector') test is wrong one-third of the time overall, biased against innocent and conscientious persons. and can be 'beaten' by sophisticated liars. Increasing use of this technique, in the United States and soon in Britain, is a cause for alarm.
For that reason alone, Parliament must be involved. I hope that my Bill will be approved, although it does not go very far. I hope that at least I have initiated a discussion that will continue and, in the short run, ensure that the results of the GCHQ experiment, which is about to begin, are reported to the House. The growing use of the polygraph is a matter for the Parliament.

Question put and agreed to.

Bill ordered to be brought in by Mr. Merlyn Rees, Mr. Tam Dalyell, Mr. John Gorst, Mr. Charles Irving, Mr. Brynmor John and Mr. Ron Leighton.

POLYGRAPH REGISTRATION AND CONTROL

Mr. Merlyn Rees accordingly presented a Bill to establish a polygraph registration and calibration organisation with powers to license all polygraphs used in both the public and private sectors subject to certain exceptions; to establish a Commission of Members of the House of Commons serviced by an Office of Technology Assessment to oversee the use of such polygraphs in the public sector; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 6 July and to be printed. [Bill 139.]

Orders of the Day — Rates Bill

2nd ALLOTTED DAY

As amended (in the Standing Committee), further considered.

Mr. Anthony Beaumont-Dark: On a point of order, Mr. Speaker. I seek your advice. Bearing in mind leaks, without which successful Government cannot prosper, we are led to believe that the Government have something of importance to say on changes in the Bill. Those changes may have significance and will have a bearing on the clauses. Will Government Ministers say something on this matter now, or do they not wish to do so in case that prejudices the vote?

Mr. Speaker: Fortunately, I am insulated from leaks.

Mr. Charles Morrison: I beg to move amendment No. 31, in page 8, line 1, leave out clauses 9 to 12.
My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) clearly referred to rumours about amendment No. 39. This morning I read those rumours in the press. The rumours are that the Government are to make a concession along the lines of amendment No. 39. I welcome that concession, as I welcome any concession the Government make. Such a concession does not detract from my opposition to clauses 9 to 12. Amendment No. 39 limits the extent of the application of the general powers to control rates. I am opposed in principle to such powers. It is hard to foresee when such powers can be used.
My right hon. Friend the Secretary of State has said more than once that it is unlikely that he will use those powers. Why, therefore, legislate for them? If we generally applied the proposition put forward by my right hon. Friend and legislated to give a power to the Government in case they should need it, not only would the House have a hectic life—at least for a short period, after which it would have nothing to do—but soon we would have endowed the Government with powers that are unacceptable within a democratic state. If the proposition is not to be adopted generally by the Government, why is it to be adopted with regard to rates and local government?
In Committee, the Secretary of State described the circumstances in which part II might be used. I shall refer to a few of his remarks which I believe to be relevant to the consideration of the amendment. He said:
First, part II is aimed at circumstances substantially different from those which pertain now.
He later said:
Taken together, therefore, the existing pressures, plus part I of the Bill, should combine on present trends—I stress those words—to secure our objectives.
He added:
I said that on present trends existing procedures, plus part I of the Bill, should combine to secure our objectives. Why 'on present trends'? The answer, of course, is that the scenario could change. The kind of policies that we now see in a small number of authorities … might prove contagious and spread to a much larger number. If 60, 80 or 100 local authorities were spending and rating in the way that a small minority does today, any

Government would have to take action to defend the ratepayers in those areas."[Official Report, Standing Committee G, 6 March 1984; c. 934–936.]
Undoubtedly such circumstances are substantially different from those that now pertain. However, given the Secretary of State's refusal yesterday to accept a limit on the number of local authorities that may be designated under part I, the provisions of part I could cover even the circumstances which my right hon. Friend described in Committee and to which I have referred. Therefore, I remain entirely opposed to part I, because in reality it involves provisions for the most major transfer of power from local government to central Government ever to come before the House.
In effect, the Secretary of State or his successors—they must never be forgotten when we are legislating—are to be enabled to assume responsibility for the budgetary processes of all local authorities. Such a proposition is mind-boggling as it means that the Secretary of State perforce will be asssuming the power to control the cost of local authority policies and the policies themselves. If that happens, local government is at an end.
There is an argument to the effect that nowadays we do not need local government. After all, we are a small country and we have pretty good communications. Why bother to have local government at all? Even if we did not have local government, the services covered by it would have to be administered. I have little doubt that most people, however often they may grumble about local government, still prefer local government services to be run by locally elected representatives in town halls or county halls. Secondly, whatever yells of horror there may be from Whitehall about local government costs, I have no doubt that the costs would be very much higher if local government services were administered from Whitehall. I should like to think that I might even get agreement from my right hon. Friend on that issue.
It is because of these views that, in my judgment, the arguments in support of the continuation of local government hold sway. If that is broadly agreeable to the House, Parliament must continue to maintain a sensible balance between the powers of central Government and those of local government.
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Part II undermines that balance. What will happen if it remains in the Bill? I have little doubt but that many more local authorities will say to themselves, "If the Government want to treat us as irresponsible, that is what we shall be." Many local authorities that are faced with major problems and poor services will decide to pass the buck to central Government. They will increase rates to challenge the Government and it will be the Government who will have to take the blame either for the high rates, to which they implicitly agreed, or for cuts in services. It will be better by far to leave out part II entirely. It will prove to be a bed of nails upon which the Government will come to regret they ever laid their reputation.

Mr. Allan Roberts: I support the amendment, which seeks to delete that part of the Bill which would give the Secretary of State, or any future Secretary of State, the power to rate-cap a number of local authorities. In implementing that power, he would be able to place an order before Parliament, on which there would be one debate, that listed the local authorities that he wished to cap. The process would be put into effect and implemented


without the principles behind it on which the Secretary of State had decided to cap the authorities being adequately laid down. The principles would be published later at the discretion of the Secretary of State.
Such an order could be placed before the House without adequate consultation with the authorities included in the order or with the local authority associations representing them. There would be no right of appeal and no right of representation would be enshrined in the Act. Unless the Government wanted consultations to take place and to allow the right of appeal, the authorities would not have those rights. Those are the circumstances in which part II comes before us.
Amendments were tabled throughout the Bill's consideration in Committee—they were supported by all local authority associations but especially those that are Conservative-controlled — which would have changed the nature of the Bill slightly to allow consultation, the right of representation and the right for local authorities which were to be rate-capped to be included in separate orders to be presented before Parliament. Those amendments would have given Parliament the chance to discuss them and debate them adequately, so there would have been at least some parliamentary scrutiny of the draconian powers that the Secretary of State had assumed. Every amendment that was tabled along those lines—amendments that would not have destroyed the basic principles of the Bill but which would have improved it, especially in the eyes of Conservative local government —was rejected by the Government and voted down. It is in that light that the general powers in part II remain in the Bill. It is in that light also that the House is being asked to support part II.
The hon. Member for Devizes (Mr. Morrison) has asked when such powers will be used. That is the question to which we addressed ourselves throughout the Bill's consideration in Committee. We cross-examined the Secretary of State and my hon. Friend the Member for Copeland Dr. Cunningham) did an excellent job in repeatedly putting the views that were passed to Opposition Members from local authority associations and asking when the right hon. Gentleman envisaged implementing such wide powers to rate-cap a series of local authorities. The answers that we received from the right hon. Gentleman were inadequate. First, the Secretary of State said that he did not envisage that the powers would be used. Why do we need the powers at all if they will not be used? The Secretary of State said that they would deter local authorities from behaving in a profligate manner. The powers would be necessary in case local authorities suddenly changed their behaviour. He hoped that they would not be used. They were a form of local authority independent nuclear deterrent that would not be used because their effect was too terrible and draconian to contemplate.
Those were the sentiments, if not the very words, of the Secretary of State. We asked him in what circumstances such a sudden change would be likely to occur in local government to make such deterrent powers necessary, but he did not really have an answer.

Dr. Alan Glyn: I am grateful to the hon. Gentleman for giving way. Is he taking the line that the general powers of part II could be used by this Government and any successive Government, who could assume direct responsibility for local authorities at

any time? Does the hon. Gentleman also agree that, unless amendment No. 39 is passed, good and prudent authorities would be rate-capped irrespective of their merit?

Mr. Roberts: The answer to the question asked by the hon. Member for Windsor and Maidenhead Dr. Glyn) in relation to my argument is that the Government, while taking those powers, deny the need for them.
But a weapon has never been invented and stockpiled that has not been used eventually. As the hon. Gentleman says, prudent local authorities, including the metropolitan district of Sefton, which covers my constituency in Bootle, are anxious and fearful, although they claim to support the legislation.
Every prudent Conservative or Labour-controlled local authority has heard the Government's arguments before. When the Local Government, Planning and Land Act 1980 introduced the block grant system, we were told that prudent local authorities would not suffer. We were told, when the Local Government Finance Act 1982 was passing through the House, that prudent local authorities would not suffer. The proof of the pudding has been ir the eating, as prudent authorities have suffered under both Acts, and it has not been only the profligate, Labour-controlled overspenders that have had their grant held back. The metropolitan district of Sefton, which I have often called a paragon of underspending virtue as it wields the axe with great pleasure, has lost £1·9 million in the recently negotiated rate support grant settlement. Many local authorities that have kept tight ships have suffered from the Government's legislation. Conservative and Labour-controlled associations fear that the powers will be used against them if they are put on the statute book.
There is a further reason for believing that the powers will be used. There was an intimation of the circumstances in which they will be used when the Secretary of State for the Environment made two major speeches in the middle of the night, when the press and everybody else had gone home. It was reported in the newspapers that the Treasury was very angry. The Secretary of State made his speeches in an attempt to reassure local authorities and associations and Conservative Back Benchers that the general powers would not be used, and told the Committee what savings would result from the use of the specific powers. Nothing that he said was in line with the public expenditure figures in the White Paper. As I said yesterday, this is not Department of the Environment legislation — it is Treasury legislation.
The more the selective powers are used, the greater will be the pressure to use the general powers. If selective powers are used to prevent profligate local authorities from putting up their rates and spending money on services in a way that the Government do not want, they will receive more from the Government in rate support grant as a reward. Higher public expenditure will result from selective rate-capping, which will increase the public sector borrowing requirement. The Treasury has a fixation about PSBR, and will cry, "Whoa! We are not having this. You must reduce the total amount of public expenditure to get PSBR right. The use of selective rate-capping is pushing up public expenditure on local authorities."

The Under-Secretary of State for the Environment(Mr. William Waldegrave): The hon. Gentleman's argument that the proof of the pudding is in the eating is no more convincing for the frequency with which he and


others repeat it. The Treasury would be delighted, as I said yesterday, to spend more Government money. For example, if all local authorities hit their targets and there were no holdback, public expenditure would be within the limits set by the White Paper. The hon. Gentleman is making a fallacious point.

Mr. Roberts: I do not believe that. If Conservative Members believe it, they are more naive than I thought. Successive Governments, including Labour Governments, are past masters at making sure that public expenditure cuts are blamed on others. Everyone is in favour of cutting public expenditure, so long as they are not blamed for the rent increases and cuts in services that arise from lower public expenditure. The Government will not create a position in which their expenditure increases and local authority spending is reduced and they have to increase taxation to compensate for lower local authority rate demands. That will not happen, because the public sector borrowing requirement would increase.
It is fair enough to count rates as a part of public expenditure, which the Treasury does. However, if rates were held down that would cause a higher Government borrowing requirement because grants to local government would be higher. That might get out of hand and the Treasury would not accept it. Nor would it accept—the Bill achieves this in a delightful way — that the responsibility for cuts and rate increases should rest squarely on the Government's shoulders, as the amendment suggests.
Conservatives will no longer be able to appear on television or in their constituencies and blame Labour local authorities for rate increases with which they disagree, or blame them for driving industry from their areas. The rate increases will be forced by the Government. It will not matter whether the council is Conservative, Liberal, Liberal-Conservative or Labour. The Government will make sure that the electorate know about the powers. Indeed, the controversy over the legislation, especially the powers that we are debating, will make the issue clear and local politicians will have no need to tell their electorate about it.
What will local elections be about in future if part II remains intact? I remember that local elections were fought about the balance between services for which the electorate—the ratepayers—could afford to pay and the services that they demanded. Local authority electors want good services and low rates. The arguments concern the balance to be struck between the rates levy and the level of services in relation to rents and other charges, based on the Government's rate support grant settlement. Councillors at the grass roots of many constituency Conservative and Labour parties argue in their communities, take an interest in local issues and come along to party meetings to argue that very issue and to put it before the electorate.
The rates have generally been higher in Labour-controlled local authorities, where services may be better. In Conservative-controlled local authority areas, rates have been lower and the services have not been so good, although some people may disagree with that assessment and refer to efficiency in cutting out waste.
We have been increasingly efficient in cutting out waste since the late Anthony Crosland made his "The party is

over" speech, which I remember well. I had an eight-course meal with him at Manchester town hall at the time. We have been cutting waste and becoming more efficient, yet we still argue and have local elections. Heaven knows, the number of people who vote in local elections is low enough already. There would be nothing left to argue about if the Government decided the balance between local rates and service levels and determined GREs, targets and expenditure limits and the service levels for each local authority as a means of deciding whether to rate-cap. What is left for the locally elected representatives to do?
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The whole of the legislation strikes at the heart of local government democracy. Part II of the Bill centralises local authority powers. That is unique outside the Soviet Union. No other western European country is setting about destroying local government in the way in which the legislation does.

Mr. Waldegrave: The hon. Gentleman should not get carried away. Can he name a single western European country where the upper tier of government, whether national or federal, does not have some powers over the rate base and rate limits of the lower-tier authorities?

Mr. Roberts: I cannot. That was true in this country before the Rates Bill was introduced, but the extent to which one takes those powers matters.
No one argues that local government should not function within the framework of legislation and the financial regime laid down by the Government. That is the traditional relationship between the Government and local authorities. Within that framework, the local authorities can take local decisions. Those traditional sacrosanct areas of local decision-making are being destroyed by the legislation, and I and others take exception to that.
In America, the opposite is happening. That is the place that people who are not of my political persuasion point to as the enterprising society, with a President and central Administration intent on cutting public expenditure and reducing the budget deficit. If they contemplated interfering with local government and democracy and the right of the local electorate to control its own affairs within the states and the local government communities, the American people would be up in arms.

Mr. Waldegrave: The hon. Gentleman may be making just a general rhetorical point, in which case I apologise for interrupting him, but is he aware of the controls in each tier of American government over the power of the lower-tier authorities to tax, which are very exact?

Mr. Roberts: I know exactly what happens in America, having studied it there. I know that if the Executive, Congress or the Senate decided to introduce such legislation, the people would be up in arms. They would not allow it to happen. Local democracy is vital. The Americans elect even the dog catchers, let alone the chief constables. They determine and control expenditure within the framework laid down by the Government.
The Conservative Government are extending the frontiers of the state. The tragedy is clear in part II. The decision-making process is not handed over to Ministers when the powers are taken away from local authorities, but is handed over to civil servants. The system of calculation is complicated and difficult to understand.
Ministers in Governments of all political persuasions take political decisions and, if the civil servants control the


Departments, the Ministers take the ultimate responsibility. Political decisions are taken by Ministers, not by civil servants who are the servants of Ministers. However, if the Government take upon themselves the powers to control up to 100 or even 400 local authorities, the detailed job that will be necessary under the general powers of rate-capping will not be done by Ministers. The principles cannot be assessed in relation to each local authority, and the calculations cannot be made. Political decisions will be taken away from democratically elected councillors and given not to Ministers but to civil servants and bureaucrats. Do you really want in your locality—

Mr. Deputy Speaker(Mr. Harold Walker): Order. I wish that the hon. Gentleman would not bring me into these matters. I have problems enough.

Mr. Roberts: I apologise.
Do hon. Members on both sides of the House really want the situation to be changed so that at their surgeries they can no longer say to their constituents, "This is a local authority matter, so I shall get in touch with the local authority. Have you seen your councillor?" That will not be possible because the councillors will say, "I have no power over this. We have been rate-capped. The Government have intervened. You had better go and see your Member of Parliament." The queues at the surgeries will grow longer.
Do Conservative Members really want to turn every local authority in the land into the quango that the water authorities have become? There is no accountability, and when the rate bills come through the door people say, "It is absolutely scandalous. Who is in control and to whom do I complain?" Mark my words, constituents complaining about social services, education, housing and so on will come to hon. Members, not to councillors, if the legislation is pushed through in its present form.
We have tried throughout Committee and Report stages to save the Government from themselves. I do not know why we are doing it. They are in an impossible position. It reminds me of what happened to a previous Labour Government when they tried to introduce "In Place of Strife". They knew that they were doing wrong. Ministers did not believe in their speeches in Committee as they followed their briefs. Everyone is opposed to what they are doing, but they will not listen. [HON. MEMBERS: "That is wrong."] It may be wrong, but I challenged the Secretary of State to name leaders of Conservative-controlled councils who support the legislation. He named one. Ministers named leaders of Tory groups who opposed profligate Labour authorities, but they could name only one leader of a Conservative-controlled local authority, Ron Watson, the leader of Sefton local authority, which covers my area, who supported the legislation.

Mr. Waldegrave: I should like to give the hon. Gentleman another example. The leader of my own local authority of Bristol city council, Mr. Bob Wall, is a strong supporter of the Bill.

Mr. Deputy Speaker: Order. I have no power to prevent Ministers or other hon. Members from intervening, but I hope that the Minister will appreciate that we are trying to have a debate, not a dialogue. Several hon. Members are waiting to speak.

Mr. Roberts: I apologise. I shall bring my remarks to a conclusion shortly.
Two names have now been given, but in Committee only one was given. I have been in the House for only five years and have served on many Committees, including Committees on Housing Bills and Finance Bills, but representatives of Conservative-controlled local authority associations have never before attended meetings of Labour Members on a Bill to brief them on behalf of Conservative councillors. The majority in the ADC and the ACC wanted us to help them to try to persuade their Government to change their minds.
Part II is the crux of the Bill. I believe that Labour-controlled local authorities are doing a good job, but they will be rate-capped under the selective powers. I do not accept this, but the vast majority of people who believe in local democracy might accept that the Government have the right to intervene exceptionally when local authorities overstep the mark and go outside the normal parameters of the relationship between the Government and local authorities. However, to take general draconian powers, as the legislation does, is to destroy local democracy and centralise power in a way that all good democrats who believe in freedom should reject. I hope that the House will reject part II of the Bill.

Mr. David Howell: The amendment of my hon. Friend the Member for Devizes(Mr. Morrison) brings us to the part of the Bill that presents the most difficulties for some of us and is the most puzzling to come from a Conservative Government.
The Bill falls into two completely distinct parts. The purpose of part I is to protect the ratepayers from gross abuse. No one is stronger than I in supporting the ending of those abuses. I believe that in many ways the protection of the ratepayer provided in part I could be stronger. I would like to see a move towards industrial derating and other measures for protecting the ratepayers more rapidly. Nevertheless, I believe that the purposes of part I are right. The supreme example of the abuse of the ratepayer has been the antics of members of the Greater London council.
I understand that the GLC will be abolished in due course. although my personal view is that some form of replacement will be needed.
Part II of the Bill deals with expenditure control. Ministers have said again and again—and I believe that they are right in their presentation—that the Bill is basic to the Government's strategy which aims to achieve stable public expenditure in real terms, giving us room for the tax cuts which I believe to be the key to new jobs and an expansion of our prosperity. Admittedly, I myself would argue that, in a way, the tax cuts will determine whether public expenditure cuts succeed, rather than the other way round. However, broadly speaking, I support the Government's strategy.
It would therefore be wrong for me to be critical of part II unless I can answer two fundamentally important questions. First, is overall control of local government expenditure essential if the Government's basic strategy is to succeed? Secondly, is this the right way to establish that control? In answer to my first question, I believe that such control is right. The previous Labour Government also took the view that it is right for the Government to seek overall control of total local government expenditure. They sought to do so, and the present Government rightly seek to do so, too. It is right to do so, not so much in order to conform with the precise PSBR targets and the scientific monetary absolutism that has sometimes been advanced.
It is absurd to be over-precise. If one considers the figures for the next few years, the fiscal adjustments alone show that the figures are subject to enormous margins of error. It is right because Conservatives believe in less, and better, government. We want a lighter burden on the citizens, particularly those who are trying to start new businesses and create new jobs. It is, therefore, right for the Government to seek overall control of all local as well as national government expenditure.
The second question has been the subject of constant debate, notably in recent exchanges with Ministers at the Dispatch Box. Is this the right way to achieve the aim of lower public spending, which is essential to the success of the Government's strategy? The Under-Secretary of State began bravely yesterday by suggesting that no serious commentator could doubt that the measures would work. He immediately found that a number of serious commentators doubted it.
The issue is a difficult one. My best guess is that the measures will probably work and that there will be cuts in overall expenditure, although central Government expenditure may rise if the rate support grant rises as a consequence of the Government's success in capping the rates. I believe that the measures will probably work, but what will the price be? If there are expenditure savings, they are uncertain. The political cost of part II is certain, and will be very high. First, there is the constitutional issue. I congratulate the Secretary of State and other Ministers on having now made it clear that they understand that this is a matter of major constitutional significance. Earlier, it was not clear that some Ministers understood that.
Secondly, the Bill is a centralising Bill and promises to lead to an even more unholy tangle between Whitehall and local government. Thirdly, I am sure that in another place their Lordships will try to chew it up.
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So the political price will be high, and it is uncertain whether part II will produce economic gains that will contribute to the Government's basic strategy, of which I approve. Any such gains will probably be very small. At this stage in the passage of the Bill, the Government would do better to limit the general powers and accept some of the amendments that have been tabled, possibly exempting authorities that stay below their GREs and keeping the wider powers for the wild men. In that way they might find it easier to achieve their overall aim of controlling expenditure in line with the basic strategy.
It is easy to say that, but what better means of expenditure control could be found? First, the Government should not underrate their own success so far. The penalties and grant abatements have been fiendishly complicated and in some cases unintelligible, but they have had some effect. Although they have produced unfairnesses and need refining, they have had an effect in reducing the rate of increase in rates and in local government expenditure. That is a start, but it is not nearly enough. In due course, the Government will have to move towards the reform of the local government structure, a clearer definition of local government powers and a much more vigorous promotion of the privatisation, contracting-out and hiving off of many functions which have been unnnecessarily assumed by overblown local government.
The rates may be here to stay, as my right hon. Friend the Secretary of State for the Environment said at the weekend, but there is enormous scope for making local government more consumer-responsive, more local and more efficient, and tightening up its accounting methods. Yesterday, my hon. Friend the Member for Bristol, North-West (Mr. Stern) made a useful contribution on that point. As it stands, part II will not achieve that. It does not reinforce the vital expenditure control which, I understand, Ministers are as determined as I am that we should secure.
There is an analogy with the attitude to the National Health Service. If we continue to cut at the edges, we shall in the end create the maximum aggravation and the minimum gain. The reform of local government structure and the redefinition of its powers is a nettle that will have to be grasped if we are to achieve better expenditure control. Part II of the Bill is not a move along that path. It shows signs of an impatience with events which is not good for our party, for the Government or for the country. I hope that the Government will listen carefully to the considerable experience which my right hon. and hon. Friends have acquired on these matters and will amend the Bill to remove those dangers.

Mr. Simon Hughes: I doubt whether the Secretary of State and his colleagues are quite as concerned about the representations made from this side of the House as they are about those made by Conservative Members who are warning them about the powers that they are seeking to persuade us to give them to limit the rates and precepts which may be raised by all local authorities. The constitutional point has been made in every speech today. The Government are attempting considerably to change the constitutional balance, in order to provide themselves with a weapon of economic management which may or may not succeed. This is causing great dissatisfaction to those involved in local authority management, who would rather see many other reforms in place of this one.
Part I is a warning that if local authorities misbehave there will be a rifle shot in their direction. Part H is a machine gun aimed at them all. It is a "You just dare" type of provision. It is not even as though the Government are introducing it, like the prevention of terrorism legislation, as an emergency power that the economy needs for a while but which will not remain in normal circumstances. The history of the House is that, once legislation is on the statute book, it is difficult to retrieve the powers that it provides as it is difficult to persuade the Government to relinquish them.
Later amendments suggest that the principle that amendment No. 31 would prevent being changed could be compromised. There are reports in today's papers that the Government intend to buy off critics on their side by accepting that the general powers will be used only in certain circumstances. That is unsatisfactory. It shows the unprincipled nature of the Government's approach. They are able to back down only on the ground of pragmatism to ensure that predominantly Conservative-controlled authorities which are represented by Conservative Members here are less likely to be the victims of the powers given by part II. It is an unprincipled compromise that is unacceptable to the alliance and does not change the validity of the amendment, which says that part II should go.
The Secretary of State recently said that the 10-year search for reform of the rating system which was initiated by the Prime Minister in 1974 is over, but the Government have not come up with an alternative. Part II interferes with the system that determines how local authorities raise their money rather than approaches the matter from how the Government should deal with how they control the financing of local government as they always have and always will. By the Government's choosing, rates are a form of local authority finance. They should be left as such and not become a hybrid form of local authority finance with Government controls and curbs around the edges.
If the Government are unhappy they can, through rate support grant and other mechanisms, show their unhappiness. If the Government are unhappy about the responsibilities that are exercised by local authorities, they are entitled to set economic priorities at Westminster. However, that is not the way forward. The Secretary of State is now taking two steps forward rather than one. If he honestly believes, as he has admitted, that the powers provided by part I have had an effect on rate levels for the forthcoming financial year, he should wait to see whether that is sufficient and whether local authorities accept that they must fall in line with the Government's strategy. We should then think again about the fundamental problem that part II addresses — the entire structure of local Government finance, the services that it provides and how they are financed. We should not have, just around the corner, this amazingly powerful weapon which the Government believe can deal at a stroke with all of the expenditure problems of hundreds of local authorities.
This House sits for more hours in a year than any other legislature in any other democracy—

Mr. Robin Maxwell-Hyslop: The Liberals do not.

Mr. Hughes: On the basis of all of the statistics, we are the most overworked Parliament in the world because we refuse to devolve power. Indeed, we insist on bringing more power to Whitehall. We cling on to debates on orders about dogs in Northern Ireland and matters that are important perhaps only to people living on the west coast of Scotland. Under the Bill we are adding to Whitehall's powers and the duties of the House when we already have far too much to do. We should hand power back to the people.

The Secretary of State for the Environment (Mr. Patrick Jenkin): Will the hon. Gentleman explain why his right hon. and hon. Friends in the alliance continue to table amendments on all parts of the Bill, insisting on more and more matters being subject to orders that are debatable in the House?

Mr. Hughes: The Secretary of State knows full well that, for the purposes of debate, we must accept the premise of the Bill's long title. We do not like the Bill, nor do we like the powers that it provides—we want elected and accountable local authorities to retain their powers.

Mr. Patrick Cormack: rose—

Mr. Hughes: I shall not give way again as others wish to speak. There are many ways in which the Government could deal with the problems of financial management. They must put their own house in order first. If post-war

Governments had done a wonderful job we might be prepared to give them more powers, but that is neither the view nor the wish of most British people. They believe that successive Governments have done a pretty poor job. It is, therefore, much more satisfactory to curb the Government's powers and leave local authorities their powers until the Government can prove that they are worthy of the trust for which the Secretary of State asks.
We should resist this unconstitutional part of the Bill. I hope that, today or in the near future, right hon. and hon. Members will make it clear to the Government that such powers can never and should never be used.

Mr. Beaumont-Dark: On a point of order, Mr. Deputy Speaker. We now have with us the Secretary of State who, the press informs us, has something to tell us. As amendment No. 39 is to be debated later, would it not be helpful if the Secretary of State made a statement now?

Mr. Deputy Speaker: We are debating amendment No. 31. No doubt the Secretary of State will try to catch my eye at an appropriate moment.

Sir Peter Emery: Most right hon. and hon. Members, prima facie, take an instant dislike to general powers being taken by a Government to give them absolute authority over the finance of all local authorities in England and Wales. They are all-embracing, and the authority to centralise all financial control that the Bill gives the Secretary of State must make part II suspect.
Such action is entirely out of character with Conservative philosophy and the nature of my right hon. Friend the Secretary of State, with whom I have had the pleasure of serving as a Minister at the same time and in the same Department. Indeed, we even served in the same local authority and held the same office as chairman of the housing committee. However, we shall not go into that. We must therefore analyse carefully and completely the reasons that the Government have given for the need for part II.
The Conservative party's manifesto pledge has not yet been mentioned in the debate, but it is relevant. Our 1983 general election manifesto said:
There are, however, a number of grossly extravagant … authorities whose exorbitant rate demands have caused great distress both to business and domestic ratepayers. We shall legislate to curb excessive and irresponsible rate increases by high-spending councils.
That, I believe, is what part I of the Bill is setting out to do, but then there is a subsequent clause which says:
and to provide a general scheme for limitation of rate increases for all local authorities to be used if necessary.
The relevant part of that clause is "if necessary". If that were not in the manifesto, no Conservative Member who was elected on that manifesto could reasonably object to part II of the Bill. I believe that it is necessary, therefore, to see what the necessity is for these powers
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Let us analyse the situation. Of course, there is a possibility that at some time in the future a number of local authorities, either jointly or individually, could considerably overspend, running their own local authority expenditure massively contrary to the whole of Government policy and then calling on the taxpayer, through the Chancellor of the Exchequer, to meet 53 per cent. of that expenditure. It must be wrong for the ordinary taxpayer to have to finance services that some high-spending authority is willing to give to its ratepayers but


which he does not obtain from his local authority. There is, therefore, a reason why the Government should wish to have the power to ensure that, if that arises, they can deal with it.
I can understand the argument according to which the Government should wait until that happens before taking the powers, but I believe that the House would be somewhat concerned if, after it had gone through the whole of this Bill, that situation arose in the future and there had to be yet another Bill to deal with it.
I can therefore understand the Government wanting powers that will enable them to deal with the possibility of considerable overspending in the future, but surely that does not mean that they need powers to control expenditure by authorities which have co-operated and are permanently co-operating with Government policy.
It is this, I believe, that has brought so much unrest and so much criticism of the Bill, not just from Conservative authorities but from authorities all over the country—the feeling that it would be wrong for the Government to rate-cap them or take powers to control them when they have at all times complied with Government policy.
The Government have said, both in winding up on Second Reading and in assurances outside the House, that where authorities are complying with their policy they will not want to interfere. That is in accordance with the aspect of Conservative philosophy that I outlined at the beginning of my speech. The Government can, in fairness, point to clause 10(2), which would allow them to exempt certain authorities from the working of the order which would be introduced to carry out part II.
I am, I suppose, a fairly new boy in this place. I have seen a change of Ministers only occasionally in my 25 years, and Governments have come and gone. But I ask, why cannot these assurances be put into the Bill so that they are part of the Act when it is in on the statute book? Unless the Government were willing to do that, I would have no compunction about supporting my hon. Friend the Member for Devizes(Mr. Morrison) in this amendment, because I believe that it is quite wrong for the Government to take powers which they know they never intend to use against a whole host of local authorities.
I would like an assurance that the Government will definitely accept some of the later amendments on the Order Paper. We need to know this now in order to know how to vote on the present amendment. I want to extract a categorical assurance from the Minister that, if we do not press this amendment, he will put into the Bill in another place the assurance that those authorities that have complied with the guidance given by the Government as defined under the Act—which is normally known as targets—or, if those targets do not exist, have complied with GREA, for a period of two years, will be exempt from part II of the Bill.
That is the important matter, that the good boys, the authorities which have abided by Government edict and policy, shall never have any fear that they can be rate-capped. I am certain that that is what the Government mean, but, if that is so, let us have a definite assurance during this debate.
On my calculation, as of today there are 200 out of 413 authorities in England and 30 out of 45 authorities in Wales which for the last two years have complied with Government targets. Why should they be under threat?

The sort of assurance that I want from the Minister would immediately, therefore, cut from the effects of part II at least 50 per cent. of all the authorities in England and Wales.

Mr. W. Benyon: We are in the most appalling difficulty, as my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) said, because I want to clarify what my hon. Friend is getting at. His amendment, which we have not come to yet, deals with year 1. What happens in year 2?

Sir Peter Emery: Well, what happens in year 3, 4 or 5? I seek an assurance from my right hon. Friend that if at any time a local authority had not in the two previous years complied with the conditions I have outlined, it would be regarded as not complying with Government policy. I want to go a stage further, however, which I think will help my hon. Friend, because there is yet another point of considerable importance. A number of local authorities have for a very considerable time been below GREA and often on target but have just, perhaps this year particularly, had to go above target. I feel that those authorities which have been very low-spending on the whole also ought to be exempt from action under part II. I ask my right hon. Friend the Minister whether he can contrive to find words—as I have not been able to at this stage — to include that section as well as the provably good boys in the specification on which I have asked for an assurance.

Mr. Tim Rathbone: rose—

Sir Peter Emery: May I, before I give way to my hon. Friend, make one further point before the hon. Member for Southwark and Bermondsey (Mr. Hughes) leaves? He has suggested that the type of assurance, or the amendment, would concern only Conservative authorities. That is absolutely untrue. There are a number of urban authorities which are above GREA but are meeting the targets. Therefore, even authorities which were spending above GREA but were meeting the target figure would be exempt, and those are mainly urban authorities. It is not just the Conservative country authorities, and I thought that I ought to explain that to the hon. Gentleman.

Mr. Simon Hughes: Will the hon. Gentleman give way?

Sir Peter Emery: No. The hon. Gentleman did not give way. However, I promised to give way to my hon. Friend the Member for Lewes (Mr. Rathbone).

Mr. Rathbone: I am grateful to my hon. Friend. I wanted to add an accent to the point that he made. The problem for the authorities to which he referred is cumulative. If they keep under the levels set by the Government and even though they are far below GREA, they establish a lower base from which future expenditure can be made.

Sir Peter Emery: I agree with my hon. Friend. Indeed, he outlines the position of my county council. The assurances that I am asking for do not cover that council, so there is nothing personal in what I say.
I believe that my proposal is right. If the Secretary of State cannot give the assurances for which we have asked, it will be difficult for us not to support the amendment.

Mr. Patrick Jenkin: I think that it would be the general wish of the House, as reflected by my hon. Friend


the Member for Birmingham, Selly Oak(Mr. Beaumont-Dark), that, in view of the speculation in the press, I should intervene at this early stage.
I apologise profoundly to my hon. Friend the Member for Devizes (Mr. Morrison). Owing to an unavoidable engagement, I was not here for his speech, but I have been given a note of what he said and I entirely respect his view about the Bill. though he will not expect me to say that I agree with him. I respect his right to express his view, but I believe that he is wrong and I shall ask the House to reject his amendment.
I also missed most of the contribution of my right hon. Friend the Member for Guildford (Mr. Howell) but I am told that he made a characteristically profound speech about the relationship between central and local government. I accept much of what he said. However, my right hon. Friend was being a little unfair when he accused the Government of impatience in wanting to see part II in the Bill. As I shall explain, all sorts of safeguards are built into the operation of part II and they are integral parts of our policy.
Our firm wish is that the powers in part II will never be needed. I said on many occasions in Committee that it was my fervent wish that we would not even have to use part I, because local authorities should live within the general guidelines approved by the House.
I say firmly that it is intended to hold the powers in part II in reserve and to use them only if it becomes absolutely necessary. I hope and believe that the pressures of the existing system, reinforced by part I, will achieve our objectives and that part II can for ever remain contingent and unused. I hope that that view will underlie everything that I and others say in the debate.
I have been asked about the circumstances in which I might wish to come to the House and ask for part II to be implemented. I described the sort of circumstances on Second Reading:
Any decision about whether there should be a move to general limitation must depend on the future spending decisions of not just a few authorities but of a significant number of authorities. If it becomes apparent that, for whatever reason, a substantial block of authorities are spending irresponsibly and so are pursuing a course calculated to overturn the Government's expenditure plans, then we should have to consider asking the House to implement the general scheme. But I repeat that we do not want to have to do that. Only if the spending decisions of a substantial number of authorities cause us to act would we contemplate asking the House to activate the power."—[Official Report, 17 January 1984; Vol., c. 174.]
That is not the situation today. The hon. Member for Blackburn (Mr. Straw) referred yesterday to the public expenditure White Paper figures and said that the only way that the Government could achieve those figures was by implementing part II straight away. I say categorically that we have no intention of doing that. I have dealt at length with the significance of the figures in the White Paper and I have pointed out that year after year we have had to add on to the spending figures substantial sums to achieve realism. It is not our intention to introduce part II at the outset or, as I have said, at all.
Indeed, the pattern of local authority current spending shows that in each of the past three years, taking local authorities as a whole, there has been an ever-closer convergence of total public spending with the Government's targets. That has been reinforced this year with the prospect of rate-capping being dangled before some of the high spenders. I have previously quoted an extract from the report of the Newcastle upon Tyne finance

committee, which spelt that out. For 1984–85, we have the lowest rates increase for 10 years. It should be lower, but it is commendable.
Our problem is the tiny minority of high-spending authorities whose behaviour clearly stands out against the general trend. Their high spending pushes up the figures dramatically and has an inevitable effect on the toughness of the targets that we have to impose on everyone else. I believe that, on present trends, part I will secure our objectives. However, those trends could change. Suppose that the sort of policies pursued by the minority of councils proved contagious and the disease spread to a much larger number. Suppose that 50, 70, 90 or 100 local authorities were involved. Many might be captured by extreme Left-wing elements after an election.

Mr. Jack Straw: Elected.

Mr. Jenkin: No, I mean "captured".Mr. Livingstone was not the leader of the GLC when he was elected. Mr. Kendall was not the leader of Hackney council when he was elected. It has happened, and the hon. Member for Blackburn is as unhappy about it as any other hon. Member.

Mr. Straw: I am not as unhappy about it as any other hon. Member. The Secretary of State knows full well that there are as many changes in the leadership of Conservative groups as there are in the leadership of Labour groups. The right hon. Gentleman displays a thoroughly objectionable contempt for the wishes of the electorate by seeking to impose his views in place of those of the electors.

Mr. Jenkin: I am content to let my case stand. The electorate of London did not elect a Labour majority to be led by Mr. Livingstone, but they got it within 24 hours.

Mr. Straw: Would the Secretary of State now like to have elections in London, with Mr. Kenneth Livingstone as the leader of the GLC, and see what happens?

Mr. Jenkin: Mr. Kenneth Livingstone is on record in 1979, 1982 and 1983 as saying that it would be very much better if all the services were devolved to the boroughs. That is the Government's policy.
We shall be able to deal with the minority of councils under part I. However, if we found that a large number of authorities began to indulge in the same sort of excessive spending and rating, we could not stand by. It would go much further than the situation with which part I has been designed to deal and we would have to ask the House to implement part II, both to safeguard the Government's overall public expenditure strategy and to protect the ratepayers in those areas. The House would have to consider that matter at the time. It is not the condition at present, but it is conceivable that it could arise.
The second point that arises out of what I said on Second Reading and what I have said today is that part II is aimed at catching extravagant spenders.

Mr. Charles Morrison: My right hon. Friend referred to part I, so could he explain in a little more detail why it cannot cope with such circumstances as those that he described? It is possible, given that he did not accept yesterday a limit on the number of local authorities to be designated, for him to make use of part I even in those circumstances that he described.

Mr. Jenkin: Perhaps my hon. Friend will allow me to put my case, as the point will become clear. The essential point is that under part I we are dealing essentially with those authorities of which the spending is, by any standards, excessive. The procedures and the philosophy of part I are aimed at dealing with that. I said yesterday, and I say again today, that we do not expect, or want, to deal with more than between 12 and 20, but, as I also said yesterday, I do not want to be tied precisely to those figures.
To demonstrate that moving to part II would represent a new phase, and not just an extension of part I, we have built in a number of safeguards. Part II cannot be implemented without an affirmative order being passed by both Houses of Parliament. Before we lay that order, we are obliged under the Bill to consult the representatives of local government. There would, therefore, be a wide public debate before both Houses came to decide the matter. That in itself represents a safeguard.

Mr. Allen McKay: I am still puzzled over the answer that the right hon. Gentleman gave me in Committee about this stage of the proceedings. When would he decide that the general powers should come into being? How many authorities would have to come into the rate-capping procedures before the general powers are used? He is talking about 12 to 20 authorities, but would he increase that to 30, 40 or 50, or will part I be used to bring in so many authorities under the rate-capping legislation that, as his hon. Friends think, part II will not be implemented?

Mr. Jenkin: I made it clear that we should not want to take part I beyond 20 or thereabouts, but I do not want to be held to an exact figure. I was asked yesterday whether I would not stop at 25. I think that it would be better to leave the limited flexibility, but I give the hon. Gentleman that assurance. It is if the number goes substantially beyond that that part II will be implemented. Part II is a considerable step, as my right hon. Friend the Member for Guildford pointed out. It will represent—I do not shrink from this — a significant change in the relationship between central and local government. It will not be a step to be undertaken lightly, and that is why it will be only if we find ourselves with a substantial number of authorities that we shall feel it right to come to the House.
Secondly, we shall make sure that the general scheme will not put restrictions on sensible and responsible authorities. We made that clear in the rates White Paper, and I can quote the paragraph. This brings me to the point made by my hon. Friend the Member for Honiton (Sir P. Emery). Chapter 4 of the White Paper is about the general scheme and paragraph 4.5 says:
the levels would be set in such a way that authorities could generally be expected to contain their expenditure within them".
My hon. Friend the Member for Honiton has interpreted that not unreasonably by saying that it is not intended to impose severe restrictions on authorities whose spending is reasonable and in line with the Government's guidelines. My hon. Friend has tabled a later amendment and I understand his point that it would help him to decide how to vote on amendment No. 31 if I could give some sign of how we shall respond to that amendment. He asked why, if his interpretation is correct, it cannot be put into the Bill. As I understand it, that is the heart of his

proposition, which has a good deal of force behind it. I hope that he will accept the proposal that I shall put before the House.
I have studied with some care the details of amendment No. 39. I fear that we cannot accept it as drafted as it has some technical defects. My hon. Friend has linked his amendment to the question whether it is certain that an authority's spending is below its GREA or target for two years. Technically, one cannot know that until the authority's accounts have been audited, and that may be as much as 18 months or two years after the event. That would make it difficult to know whether or not an authority should be excluded from part II. Therefore, it would be difficult for us to accept the amendment as it stands. Perhaps he will accept my assurance that we accept the principle.

Mr. Peter Hordern: The amendment tabled by my hon. Friend the Member for Honiton (Sir P. Emery) is defective in one other respect in that it seeks to contain those authorities that have not gone above their target level, but, as my hon. Friend said earlier, those authorities have stuck most closely to the levels of low expenditure, and West Sussex is the most commendable of all authorities. They have, for this year alone, had to break their targets. Therefore, any formula that my right hon. Friend may suggest must allow for those authorities that have consistently been below the GRE level.

Mr. Jenkin: I entirely understand my hon. Friend's point, and I endorse the praise of West Sussex council, of which the spending record is most commendable. It is one of the few local authorities that have managed to achieve the Government's target of reduction in its level of public expenditure. My hon. Friend's point is a fair one. I point out to him, and to my hon. Friend the Member for Honiton, that if they may be persuaded not to press amendment No. 39 to a Division when it comes, I shall give a firm undertaking to study the matter and to table an amendment in the other place that meets the substance of the case that my hon. Friends have put.

Sir Bernard Braine: The words that my right hon. Friend has just uttered are helpful, but I am sure that he will not mind if I probe a little further. He will know that I represent a county that is one of the lowest spenders in the kingdom and one that for five years has consistently kept below its GRE level. It has been praised both by my right hon. Friend and his predecessor for its prudent management. Can he say, to ease the anxiety of those who represent low-spending authorities such as Essex, that the formula he has in mind will cover the county of Essex?

Mr. Jenkin: My hon. Friend is ingenious in his questions. He will realise at once that the implementation of part II is contingent and that it would not be introduced unless there were changed circumstances. What the situation might be in relation to any particular authority is not a question that I can answer. I think that Essex will not fall within the terms of the amendment of my hon. Friend the Member for Honiton this year because it has decided, as a conscious act of policy, to go above the target level for a year or two and has explained that to the ratepayers. I am expecting to get the sharp end of Councillor Williams' objections through my letter-box in due course, as one of those ratepayers. The point made by my hon.


Friend the Member for Horsham (Mr. Hordern) is that there may be some way of recognising those councils that, over several years, have broadly followed Government guidelines. I undertake to study ways of how we can implement what is clearly the wish of many of my right hon. and hon. Friends.

Sir Peter Mills: Would my right hon. Friend not agree that what is needed in this difficult situation is for the same determination that he is showing to curb the excessive spenders to be applied in assessing those which have been spending not so much?

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Mr. Jenkin: I must be cautious not to be drawn further than I would wish to go. I say this advisedly. There are many authorities—and I am not sure that Essex is not among them — whose view of their spending differs markedly from that of the district councillors within the county looking at the same facts and figures. I understand the point that my hon. Friend makes about Devon.

Mr. Maxwell-Hyslop: I understand the drafting defects in amendment No. 39. In drafting amendment No. 16, I took the words of my right hon. Friend from part I for precisely the reason that he has given, so that amendment No. 16 does not have such a drafting defect. It covers the case of a council which, because it has been a consistent low spender, has had a low target and has had to exceed that target, not because its expenditure is in any way unreasonable but because over the years it has been a consistent low spender. Amendment No. 16 imports the Minister's own criteria, which he rightly said were not included in amendment No. 39, and covers the case where expenditure is over the target, because the target is so low, but is under GRE, his own assessment of need.

Mr. Deputy Speaker: Order. I do not think that the hon. Gentleman can intervene to make the speech that he hopes to make when we reach amendment No. 16.

Mr. Jenkin: My hon. Friend was allowed to continue long enough for me to get the drift of his question, which put much the same point as that made by my hon. Friend the Member for Horsham in a somewhat different way. My hon. Friends are seeking to ensure that, when an amendment is tabled in another place, it will exclude from the operation of part II those authorities which have consistently been following the Government guidelines. That is the undertaking that I am giving.

Mr. Cormack: Does not every dainty step on the road to conciliation that my right hon. Friend now seeks to take illustrate that it would be far better to take the bold step of accepting the amendment eloquently moved by my hon. Friend the Member for Devizes (Mr. Morrison), knocking part II out of the Bill entirely?

Mr. Jenkin: I have made sympathetic noises to my other hon. Friends, but I am bound to tell my hon. Friend that I cannot accept that. I believe that our duty to protect the Government's expenditure targets and the ratepayers means that, if we ever had to come to take that step—and I have described the quite extreme circumstances—we would need to act with the consent of the House, and to act fast. The alternative would be to come back to the House with fresh legislation, in which case, instead of dealing with the matter promptly in the next financial year, we might have to wait one financial year, or perhaps two

financial years. In the circumstances that I describe, that would not be tolerable. I therefore asked the House to include part II, but with an amendment, when it comes back from the other place, to reflect the undertaking that I have given.

Mr. Geoffrey Rippon: If the matter is to be reconsidered when the Bill goes to another place, why not include the amendment in part I and drop part II altogether?

Mr. Jenkin: I fear that my right hon. and learned Friend is asking me to do something different from that which I have undertaken to do. That I cannot do. A number of amendments in the names of my hon. Friends appear on the amendment paper, and we shall wish to study them all carefully. I hope that the amendment tabled by my noble Friend Lord Bellwin in another place will meet with the approval of the majority of my hon. Friends.

Mr. Straw: The right hon. Gentleman said that he hoped to ensure, by an amendment introduced in the other place, that those local authorities that had observed the Government's guidelines would not be caught by the operation of part II, if, indeed, it operated. By guidelines, has the right hon. Gentleman in mind target and UREA, whichever is the higher?

Mr. Jenkin: The amendment refers to target and GREA or, if there is no target, GREA alone. I have indicated my ambition, once the selective rate-capping scheme is working and in operation for a year or two, that we might be able to dispense with the machinery of targets. The Government can give no undertaking on that, but I am sure that it would meet with the approval of the hon. Member for Blackburn if we could achieve it. In using the word "guidelines", I was thinking of guidelines from year to year and not for one year only.
I hope that what I have said indicates why part II is needed on the statute book and the somewhat extreme circumstances that would have to arise before it would be necessary to ask both Houses to implement it, and shows that we are prepared to see a substantial exclusion of those councils whose spending and rating over the years has been regarded as reasonable and in line with Government policy.

Sir Peter Emery: The assurance that my right hon. Friend has given goes a long way to reassure Conservative authorities and Labour authorities which have combined to work for Government policy, and to make the Bill much more acceptable.

Mr. Jenkin: If all interventions were as agreeable as that, I should be ready to give way more frequently.
I hope that the House will now feel it right to reject amendment No. 31.

Mr. Straw: I am sure that all hon. Menibers will wish to examine with great care what the Secretary of State has said. There is something slightly rehearsed about the leaks in the newspapers yesterday, the pressures from the softer Conservative Members who have reservations about the Bill, the little concession that the Secretary of State has made today, and the yielding by those softer rebels a short time ago, for we all recognise the ways of the Whips, and the discussions that take place behind the scenes may have something to do with this.
It is important to examine carefully whether the Secretary of State will be able to meet the serious


objections that have been raised, not only by his hon. Friends but by the Conservative-controlled local authority associations, to this part of the Bill.
We had informal contact with the Association of District Councils and the Association of County Councils on these amendments. I hope that I do not put words into their mouths when I say that I understand that the policy committee of the Association of District Councils met today and was highly sceptical, to say the least, about amendment No. 39 and its associated amendments, as was the Association of County Councils. As my hon. Friend the Member for Copeland (Dr. Cunningham) reminded the House, when speaking on the first series of new clauses, the Association of County Councils and the Association of District Councils stated:
The Secretary of State has said nothing which would meet the criticisms of the Bill by the local authority associations… The Bill represents a massive shift towards the centralisation of local decision making by giving the Secretary of State effective power to fix expenditure and rate levels for all councils in England and Wales.
One of the key questions that Conservative Members must consider, despite the protestations of the Secretary of State that he hopes never to use the power in part II, is why he is determined to see part II on the statute book. Indeed, why was he unwilling to accept restrictions to limit the selective scheme to 20 or thereabouts? As the right hon. and learned Member for Hexham (Mr. Rippon) said, why was he unwilling to accept into part I that which he is apparently now willing to accept into part II? The answer lies in the Government's public expenditure plans. As the Under-Secretary has made clear on many occasions, the principal purpose of the legislation is to ensure that local authority expenditure falls into line with the Government's plans.
It is important for Conservative Members to consider the matter. Under the plans, local authority current expenditure is due to fall in real terms by £1,500 million during the next two years. Paragraph 11 of section 2.18 of the second volume of the White Paper states that
current expenditure relevant for RSG in Great Britain is planned to rise by only 2¼ percent. in 1985–6 and 1¾ percent. in 1986–7.
That is against a background of an inflation assumption of 5 per cent. in both years. If the Government achieve that 5 per cent., they will be more than pleased, especially in view of the pressure on inflation, not least from abroad. The figures involve a cut of £1,500 million in the real level of spending by local authorities. It is a massive amount. The question is whether that can be achieved without part II of the Bill.
When we discussed part I, the Secretary of State admitted that the most that could be achieved if he rate-capped 20 or so authorities was a gross saving of about £300 million. There is no dispute about that. In net terms, the figure would be nearer £200 million, because if the rate-capped authorities reduce their expenditure they will qualify for more Government grant at the expense of other, lower-spending authorities.
Where will the Government find the other £1,300 million saving to which they committed themselves in the White Paper? The Secretary of State said that he would find it by using the pressures of targets and GREAs on authorities. We have already found this year that, if the Secretary of State pushes GREAs and targets on authorities to an unrealistic level, even the most willing

Conservative authority that wishes to observe the Secretary of State's guidance will refuse to do so. That is why Essex and West Sussex have spent above target.
If the Government next year and the year after were again to impose targets that involved a real cut in the level of spending, authorities would spend above target. We must remember that next year county councils go to the polls and, therefore, councillors are especially sensitive not only about rate increases but about cuts in services. I remember that in 1981, Conservative-controlled Lancashire, among others, was concerned about further service cuts. If such authorities are faced with a target that they believe to be unattainable and that will result in wholly unacceptable cuts in services, they will again spend above target.
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The Government cannot achieve the saving simply by using targets. Therefore, to achieve a saving of £1,300 million they must use the powers in part II. The Secretary of State is shaking his head. Time and again, both in Committee and on the Floor of the House, we have asked him how he intends to ensure that the savings required in the White Paper can be achieved by the existing mechanism. It is a matter of simple arithmetic that those savings cannot be achieved simply by the operation of part I. That is patent and has never been in dispute. If the savings are to be achieved, part II must be brought into operation—or the White Paper is not worth the paper on which it is printed.

Mr. Allan Roberts: Is there not a third possibility—that the savings can be made under existing legislation without the need for either part I or part II of the Bill, which means that the whole of the Bill is unnecessary?

Mr. Straw: If that is the case, the Bill is unnecessary. However, I doubt that it is the case.
Conservative Members have rightly represented their local authorities and their constituents during the past four years. They have told the Secretary of State that, in current parlance, their authorities have been good boys who have observed the guidance and cut to the bone. Yet three quarters of the shire counties have run up against target and spent above it. The Conservative authorities over target are, by definition, those that have cut to the bone and realised that they cannot go any further. Conservative Members know better than I do that those authorities will not be willing to make further cuts because that would not only go against their principles but could lead to electoral suicide.

Mr. Charles Morrison: A number of Conservative-controlled local authorities have been warned by Government Departments about cutting costs because they are barely living up to their mandatory responsibilities.

Mr. Straw: I am grateful to the hon. Gentleman for his intervention. Local authorities are in a vice. Statutory responsibilities are placed upon them by this House, and those responsibilities will not be amended by the Bill. The authorities will still be expected to meet the requirements of the Children and Young Persons Act, the Education Acts, the social services Acts, the public health Acts—

Mr. Richard Holt: I recently asked my town clerk how many Acts it was necessary for the town hall to employ people to operate, and I was told that there were 88.

Mr. Straw: I am grateful to the hon. Gentleman for his remarks.
Despite the Government's intention to produce less legislation, it is inevitable that all Governments produce more legislation and impose more duties on local authorities. Obviously I have political disagreements with Conservative county councillors, but I know that they seek to serve their local communities and to fulfil their statutory duties. They hate the possibility of not fulfilling the statutory duties placed upon them by the House—by the rule of law—and worry about the consequences of no longer being able to serve their communities. They exist, as do Labour councillors, to serve their communities.
Because the Secretary of State has not offered, even though he has been given many opportunities, a satisfactory explanation of how it will be possible for the Government to meet the expenditure target in the White Paper without using part II, I urge Conservative Members to be sceptical — as I believe Conservative local authority associations are sceptical—before they accept all that the Secretary of State has said.

Mr. Chris Smith: Apart from the danger that targets and GREAs might be deliberately moved down to meet overall expenditure targets, does my hon. Friend agree that the concession that the Secretary of State has given, or hinted at, offers nothing to the two thirds of county authorities that are being forced to spend above their targets and GREAs at present?

Mr. Straw: I agree. Most of the two thirds are Conservative authorities and they will gain nothing from the amendments, because they have been over targets, and in many cases over GREA as well, for at least one of the past two years. If the Government seek to accommodate them next year by increasing their targets, they will not meet their own public expenditure targets. That is the Government's dilemma. The Government keep saying that they want to help Conservative-controlled authorities, and I believed the Under-Secretary when he said that, but he has to persuade the Chancellor of the Exchequer that increasing the targets and GREAs—it is the only way to do it; there is no other way to do it within the existing financial mechanisms—can be done within the existing public expenditure White Paper. Of course, that is not possible. If the Government reduce the targets—that is one way to meet the public expenditure White Paper proposals, possibly without part II — Conservative authorities will be in an even greater jam next year than they are this year. The Secretary of State is on the horns of a dilemma, and he has not explained to the satisfaction of the House how he will get out of it.
No doubt for understandable reasons, the Secretary of State's offering this afternoon was connected with the fact that he has to conduct negotiations with the Treasury. Those of us who have had the privilege of working in the Government machine know how offerings on amendments get crawled over by one Department after another, and sentences with main verbs only suddenly have a string of subordinate and conditional clauses attached to them.
When we read the Official Report tomorrow, I suspect that we shall find that the Secretary of State has certainly made an attestation of good faith — we have never doubted that; I am glad to see the right hon. Member for Guildford (Mr. Howell) smiling, in an inscrutable way, sphinx-like at what I said about the Treasury crawling over these undertakings—but that we shall find that a good deal less than we think has been offered. Of course, something will happen in the Lords. However, may I point out to Conservative Members, who are even more worldly than we are about the way of politics, that the best chance they have of extracting the maximum number of real concessions from the Government is not to withdraw the amendments but to pursue amendment No. 31 into the Lobby this evening. It is only as a result of pressure from Conservative Members who are courageous enough to back their opinions with a vote in the Lobby against the Government that the Government have even gone this far.
To doubters who may wish to duck when even a crumb is offered, I say, "Think about what may be coming your way if you stand firm with those who have stood firm and continue to stand firm." If all those who are thinking about accepting the amendment march through the Lobby with the hon. Member for Devizes (Mr. Morrison) and his friends, part II, to which the overwhelming majority of Conservative councils rightly object, will be defeated. That is the prize, the prospect, if hon. Members have the courage of their convictions. If they do not, they will get crumbs from the Secretary of State's table. The amendment that will be moved and carried in the Lords on the basis of what the Secretary of State said NA, ill be meaningless in terms of the difficulties that this part of the Bill will cause for many Conservative authorities if it comes into force.

Mr. Rippon: I welcome the assurance from my right hon. Friend the Secretary of State that he now contemplates amendments in another place to mitigate the immediate impact and effect of this measure. I still cannot understand why these proposed amendments cannot be applied to part I and why part II cannot be eliminated. As we saw yesterday, the real danger is that the selective power in part I can be extended almost to cover the number of authorities that will be affected by the general powers.

Mr. Patrick Jenkin: I should have said, in answer to my right hon. and learned Friend's intervention, that an exemption is already written into part I which exempts any authority that spends below its GRE. It is already there.

Mr. Rippon: Yes, but the difficulty is that the Minister said yesterday that the principles that were set out in Committee were liable to be amended at any time. That is one of our objections. However, I am grateful for my right hon. Friend's assurance that all my colleagues who jumped up so excitedly need have no further fears about part I. If amendment No. 39 or the equally—if not more—admirable amendment No. 16 or a combination of amendments is accepted in principle, I have a feeling that the Government are acting on the expediency of the moment and that what may be the convenience of today may prove a grave embarrassment in the future. It was remarkable how many right hon. and hon. Members jumped up and asked what the position was for this or that authority.
The truth is that even under selective rate-capping the interests of prudent authorities are not adequately


protected. Whatever can be said about the justifiable nature of rate-capping for selective authorities which are proved to have abused their powers or acted improvidently, there is no justification for part II. Nothing that the Secretary of State said this afternoon should lead people, for that reason, not to vote for the exclusion of part II.
In my opinion, a Government should not take powers for which they say, quite openly, they see no present requirement. If the situation changes in future, the Secretary of State should introduce primary legislation to deal with a situation which, if it arose, would be—in his words—a major constitutional matter. So far today, we have not discussed this major constitutional issue. That arises directly under part II. It gives a Government wide, sweeping general powers of a kind that have not hitherto been regarded in this country as being in accordance with the rule of law.
The Secretary of State says that we are unitary state. The Soviet Union says the same thing of itself. Section 2, I think, of the Soviet constitution says that inferior bodies are always subordinate to superior bodies. That is not our view in this country. Local authorities have rights and responsibilities, given to them by this House by statute, which have survived for a long time. I do not believe that it is right to take general powers such as are in part II to interfere with the historic relationship between central and local government.
Of course, in the last resort, Parliament is supreme. I quoted some authors that members of the Cabinet might refresh their minds by reading. I think that my right hon. Friend the Secretary of State for Education is fond of reading lists. I suggested yesterday that the Cabinet might read the Lord Chancellor's "Dilemma of Democracy", the Secretary of State for Education's "Freedom under the Law", John Locke, Professor C. K. Allen's "Law and Orders" and the Under-Secretary's admirable books. Perhaps today I should refer to two other authorities—both of whom I understand are very popular with the Government. One is Professor Hayek.
6.30 pm
I played some part in helping Professor Hayek in the days when he was writing a splendid book, "Road to Serfdom". Hon. Members should read what he said about the rule of law. He said that not everything is defined by law but, on the contrary, the coercive power of the state can be used only in cases defined in advance by the law and in such a way as it can be foreseen how it will be used. It is clear from all the interventions this afternoon that we have no idea how or in what circumstances part II will be used. All we have is the Government's assurance that they do not think that it will have to be used. That is not good enough.
In the famous case of the Bishop of Rochester's cook in the time of Henry VIII, Parliament resolved that the said Richard Rose should be boiled to death without benefit of his clergy. That was the supremacy of Parliament, but, as Professor Hayek says, it is hardly the rule of law. That is why a Bill of this kind should be limited in its extent. A power to rate-cap selectively should be applied carefully and each case considered on its merits. Moreover, such a measure should be limited in time, particularly as it is

necessary to have some reorganisation of local government finance, rather than that there should be an indefinite continuation of this measure.

Mr. Maxwell-Hyslop: Might not the particular circumstance of the Bishop of Rochester's cook be the one and only one on which the hon. Member for Cambridgeshire, North-East (Mr. Freud) might have made a useful contribution to our debate?

Mr. Rippon: We are always glad to have a contribution from the Liberal Benches. Certainly, they should be supporting the amendment. However, for the moment I am addressing myself primarily to the House as a whole, particularly to my hon. Friends.
When I was trying to produce a philosophy of the radical Right, there were helpful contributions from the Conservative Political Centre, which published "Freedom under the Law" by my right hon. Friend the Secretary of State for Education and Science. It publishes books given to young Conservatives as a guide as to the principles and precepts that they should follow. Another Right-wing thinker, fashionable at present, is Mr. Russell Lewis. In his "Principles to Conserve" he wrote:
Local Government, once the lifeblood of liberty, falls increasingly under the sway of the central administration.
Who can now say that the Bill embodies any reversal of that process?
It is not right that Conservatives should say in Opposition that we stand for town hall, not Whitehall, that we do not believe that the gentlemen in Whitehall know best, that we want a devolution of power, that we accept the freedom of local government and that we believe that that is one of the twin pillars of our constitution, yet in Government produce a Bill such as this, particularly with the wide, sweeping powers that are contained in part II.
Whatever hon. Members may think about the merits of selective rate-capping, I hope that they will have no hesitation in supporting the amendment tabled by my hon. Friend the member for Devizes (Mr. Morrison).

Mr. Jack Thompson: I consider it an honour and a privilege to follow the right hon. and learned Member for Hexham (Mr. Rippon), who represents a part of the country from which I come. We are close neighbours and I support what he has said. I am afraid that I shall not achieve his eloquence or witticism, but I have not been in the House as long as he has. However, I respect his opinions and knowledge of local government.
I was somewhat surprised — the right hon. and learned Member for Hexham referred to this—when the Secretary of State hinted what will happen in the changes. Before becoming a Member of the House I spent most of my working life —about 11 years — in local government. I was at the receiving end of what came from Whitehall and Westminster, and that experience made me rather suspicious. Hints appear in the press or in letters to local authorities but when it comes to the nitty-gritty matters are slightly different. I would rather see something in writing. I think that many of my hon. Friends would prefer to see in writing this small concession that we have been told about today.
I am reminded of the school room where the teacher has the tawse. There may be those who are too young to know about that. The teacher tells the class that he will use the tawse on those he considers to be naughty. They will be bent over the bench and the tawse will be swung six or


seven times as a punishment. Those who have offended less are shown the tawse and told that that is what it is all about. We now find from the Secretary of State's comments that there is a hint of some sweeties in the desk. I am not sure whether they are nice-tasting or not. I would rather see the quality of the sweeties.
I was rather astonished to hear the Secretary of State comment on the leadership of the GLC—I think it was a throw-away comment—and the fact that following its election the Labour group on the GLC decided to change its leadership. I was leader of the political group which controlled my county council at the time of the 1981 elections. Last year I resigned that leadership when I became a Member and, therefore, the leadership changed. We did not have an election.
As a member of the Association of County Councils, that illustrious body near Sloane square, I saw its leadership change in 1981. It was a good job that it changed, and it did so because the controlling Conservative group of the ACC decided that it wanted to see such a change. That is probably part of the reason for the Bill. A far more responsible leadership took over—Conservatives with a better understanding of local Government than previously. I respect the attitude that has been taken since the change in leadership. We have been assured that as far as possible that leadership will not be dominated or pushed around by the Government. When the leadership of the Tory party is changed — there seems to be some sign that that might be in the pipeline—I hope that we shall have a general election. It will be nice to have a general election at that time.
I have not been able to read all of the documents, but it is clear from those that I have and from the debates that I have listened to carefully that one area has not been touched on. There have been various side comments but nothing specific has been said about an important area of local government which clauses 9 to 12 affect—local councillors. We tend to talk of local government as a collective organisation and local authorities as a corporate management organisation. We have never really talked about the local member of an authority, whether it be metropolitan county, metropolitan district, shire county or shire district authority. We have never talked about what individuals feel about the propositions that have been put to them.
I have spent 10 or 11 years alongside many councillors, not only from my authority but elsewhere, of all political shades, from the extreme Left to the extreme Right of the Conservative and Labour parties. I am not sure where the Liberals stand. They are all responsible people.
We must understand what is involved in being a councillor. It does not end with knocking on doors at election time, working hard up to polling day and perhaps being elected. I recall that when I first joined my county council I was under the impression that I would attend county council meetings' perhaps four times a year, with possibly a fifth attendance on budget day. I was soon made to realise that life as a councillor was not like that.
Years later, shortly before resigning as leader, I would arrive at county hall at 9 o'clock in the morning, remain there until 4 in the afternoon, leave to go to my work by 5 in the evening and arrive home at 1.30 the following morning. The following day, and the one after that, I did the same. I accept that I may have been an exception, but there are thousands of county councillors doing much the same job in much the same way.
In my county, because of the location of the county headquarters, councillors travel 100 miles a day to attend meetings. They do not do that because they are receiving the salaries of Members of Parliament. Not long ago they were receiving £14·85 a day, less tax, which in aggregate meant that they were getting about £8. Some people would hardly stand up for £8, let alone travel 100 miles to attend a meeting.
Councillors give up their leisure time, their privacy and much of their family life. I know of one man who lost his job because of his local authority involvement. Certainly thousands of councillors lose their promotiom prospects, as I lost mine for a time. Such matters must be borne in mind when we talk about local government changes.
These people accept responsibility for their communities, a responsibility which in some cases involves a negative return in the sense that on many occasions unpopular decisions must be taken. Some decisions are the result of Government pressure such as being forced to close small schools. I regret that the hon. Member for Berwick-upon-Tweed (Mr. Beith) is not in his place, because, before I came to this place, he and I fought battles over the closure of small schools. We tried our best to close schools only for educational reasons. Since 1979, however, we have had to consider closing schools for financial reasons.
Some local authorities have reached rock bottom in terms of cuts and will be hard pressed to cut further. That is why there will be resistance to further pressure to cut. Indeed, that is why some authorities are making a militant stand, and while I do not agree with them I appreciate why they are taking such an attitude. More and more authorities will be making a stand, and they will not all be Labour authorities.
6.45 pm
There are likely to be some changes in the control of local authorities in 1985. Councils which have never imagined being under our control will be Labour-controlled as a result of the local elections—that is, if there are still people available with the same degree of interest in local affairs. One of my greatest fears is that the sort of people we need in local government — those prepared to devote time to the work that I have described—will not be available.
For example, the chairman of Northumberland county council during the war was also chairman of the local education committee. If she had been paid by the hour for her work for the local authority, she would be a millionaire. She has devoted a lifetime to local government. The likes of her we shall never see again, especially if the Bill is unamended.
What are the Conservatives in general, and the Secretary of State in particular, trying to achieve? Since 1980, the tree of local government has had some of its major branches chopped off. Nobody seems to want to cut the tree down. If the Government want to cut it down, let them say so; if they want to do away with local government and its present composition, let them be clear about it so that we know what we are discussing.
They must stop chopping away at it because the point will be reached when local people will not be interested in participating in local affairs, and then we shall well and truly have central control. If that is what the Government want, let them say so, and we can talk about a new form


of control at the local level, be it by way of Government commissioner or some other form of devolved central administration.
I was discussing this issue with my chief executive in Northumberland before leaving to come to the House. I asked him, "How do you see the situation?" He replied, "I see a clear distinction between being a local government officer, responsible to the people of the area, with whom I identify"—he came from outside Northumberland to be our chief executive, so he is not a local man—"and I want to talk to the local people across my desk and in our committee room. I have no desire to be a civil servant receiving directives from the Department of the Environment each Monday morning telling me what to do that week and having to report back each Friday." He made an important point. Unfortunately, we seem to be heading in that direction.

Sir Bernard Braine: My first reaction to the Secretary of State's statement was one of relief, and I thank him for what he said, as far as it went. I say "as far as it went"—

Mr. Straw: It did not go far enough.

Sir Bernard Braine: —because up to that point we who represent low-spending and prudently managed local authorities, such as Essex, felt that we were being treated unfairly. Indeed, as Essex has consistently kept below its GRE figure for the last five years and has one of the lowest per capita rates of expenditure on services in the country, we felt that we were being treated unjustly.
The Secretary of State will recollect the strong representations that were made to him not only by hon. Members who represent Essex constituencies but by the leaders of the Essex county council. To borrow a phrase from the most distinguised Essex Member of Parliament of all time, the situation had reached the point at which, frankly, "up with which we would not put". I made that clear when we debated rate support grants some weeks ago.
We did not enter the last general election with a pledge to penalise well-run local authorities which consistently co-operate with central Government. We said that steps would be taken—in my view, rightly—to deal with the relatively small minority of reckless and profligate authorities. That is what my constituents and I understood.
I can claim—no doubt other hon. Members will do the same in respect of their authorities—that Essex is one of the best-managed local authorities in the country. Its expenditure on local government services is 7·4 per cent. below the shire county average, which itself is 27·4 per cent. below the metropolitan areas average, and is 90·2 per cent. below the London average. Yet it has been put in an impossible position, needing to spend £480 million in the coming financial year just to maintain its relatively low current level of services. That figure takes no account of increasing population and the effect of new legislation. Under the rate support grant settlement, the Government have set a target for the county of £473,500,000. That falls short of its 1984–85 budget by £6,500,000.
The dilemma faced by Essex or by any low-spending county is that it must either reduce its expenditure on services or raise rates, and run the risk of attracting penalties. The irony is that my right hon. Friend's

predecessor appointed private sector management accountants who reported in 1983 that they detected no areas where significant savings could be achieved. Indeed, my right hon. Friend wrote to the county council in October 1983 saying that he was
glad that the consultants had confirmed that Essex is running a tight and efficient ship.
None of us had the faintest idea that an authority of that calibre and with that kind of responsibility was going to be penalised by this Bill.
I realise that, at this stage, it is impossible for my right hon. Friend to reveal his intentions, other than in general terms. If he expects my vote in the Lobby and wants me to assure Conservative councillors in Essex that the Government are doing the right thing by local authorities, he must say a little more. He must tell me that he will ensure that low-spending counties, such as Essex, which have co-operated with the Government and which are faced with increasing expenditure simply because they have an expanding population and have kept their per capita expenditure—that is the figure that matters—within reasonable bounds, will be given more realistic targets and not be penalised.

Mr. Jenkin: I spoke for quite a long time previously, and I did not intend to intervene again. I cannot add to what I said before. The circumstances in which part II will be implemented are as yet unknown. I intend, in accordance with the undertakings I gave, to exclude from the operation of part II those authorities whose spending has been broadly in line with the Government's guidelines, as measured in the amendment tabled by my hon. Friend the Member for Honiton (Sir P. Emery). I said that I will consider other amendments as well. I am sure that my hon. Friend recognises that, at this stage, I cannot give an undertaking that that measure will affect any individual authority. We are talking about something that is unforeseen and unforeseeable.

Sir Bernard Braine: The fact that my right hon. Friend intervened just then indicates that his intentions are sound, even if he cannot go into detail. It is unnecessary for me or my colleagues in Essex to press him further on what he has said. I trust his judgment on this matter. I thank him for the way he received my somewhat caustic remarks. He knows that the last thing a Conservative Government should do is to penalise those who have managed their affairs prudently, who are guardians of the ratepayers' interests and have co-operated with the Government, as they intend doing in the future. Between us, I feel sure that we shall find a solution to the problem.

Mr. Chris Smith: Hon. Members have just witnessed an extremely interesting exchange. The hon. Member for Castle Point (Sir B. Braine) highlighted one of the central problems of the way local government finance operates and part II will operate. He identified the inadequacies of the arrears and targets system as it will operate for his authority. Because of those inadequacies, the Secretary of State cannot give a categorical response about whether his concession will apply to a particular authority. The hon. Gentleman lauded Essex as a prudent and sensible spending authority, although I should describe it as an inadequate spending authority. Even such an authority can none the less fall foul of the Government's target system, and that says volumes about the inadequacies of the system.
I shall briefly comment on the general content of part II. I support the amendment that seeks to delete it. The Secretary of State put the position extremely well when he said that he did not know the circumstances and the manner in which part II would come into operation. That highlights the problem faced by all hon. Members when discussing this part of the Bill. It highlights also why part II is a bad part of a bad Bill.
If the Secretary of State is worried about the possibility of a plague of left-wingedness on local authorities spreading to more than the present 20 or so authorities he has in mind, why does he not envisage using part I? There is no limit to the number of authorities he can select under part I. Yesterday he deliberately rejected amendments that would have placed a limit on the number in the manner he said he has in mind. Why does the right hon. Gentleman not intend to use the powers selectively to have a go at those authorities? That question was asked on Second Reading and in Committee, and the Secretary of State has not yet adequately answered it. If part I contains powers to tackle the problem, why does he in part II take upon himself further powers to tackle it?
If the right hon. Gentleman cannot envisage any circumstances in which part II is needed, and if he cannot know, as he has admitted, the circumstances in which he would want to implement it, why is that measure in the legislation? Legislation should be introduced only to meet a proven need or a definite circumstance. Legislation based on a hypothetical scenario of circumstances in the dim and distant future is not good legislation. That is what the right hon. Gentleman has done under part II.
We can argue passionately, as I did yesterday, about the provisions of part I when applied to specific local authorities and areas, especially my constituency. We can have a fair political argument about the needs of people in those areas, the way they should be met and the actions of particular local authorities. That is a definite circumstance about which we can have a definite and detailed discussion, but the powers in part II are quite different, for they are based upon a hypothesis and an unknown circumstance which the Secretary of State has refused to identify. He has refused to set out the circumstances in which he would envisage implementing that legislation.
It is for that reason that I still believe that Conservative Members should address themselves to the relatively small concession that the Secretary of State has hinted at and to the basic purpose of part II in its entirety. If the Secretary of State cannot identify the circumstances in which that part of the Bill will be brought into operation and cannot tell us why he wishes the powers to be held by himself, even when he has powers under part I, he should take part II away and prepare himself, if and when the circumstances arise, to bring forward further legislation directly to address those definite circumstances. So long as the circumstances remain unknown and the Secretary of State's commitment remains unknown, part II remains a very bad section of a very bad Bill.

7 pm

Mr. Maxwell-Hyslop: When my right hon. Friend the Secretary of State responded to my hon. Friend the Member for Honiton (Sir P. Emery) he was definite in his commitment to accept the substance of amendment No. 39, which would do nothing, but he circumlocuted the crucial issue of whether he is prepared to accept the same

exclusion for part II that he has written into part I, which is that local authorities that remain within their GRE limit should not come within its provisions.
Another question is whether the de minimis rule, which my right hon. Friend has imported into part I, should apply to part II. It is the rule that provides that rate capping will not apply to local authorities which spend less than £10 million a year. If it is right that it is in part I, it must also be right for it to appear in part II. My right hon. Friend has not advanced any argument to explain why it is right to have it in part I but not in part II.
There are many targets that are well below GRE. They are below that level because the local authorities concerned have a history of low expenditure. Therefore, it is bizarre and inappropriate that local authorities which have a history of low expenditure should be penalised by a low level of rate support grant, as they will be under the target system, and made to suffer rate capping potentially because they have been low spenders as opposed to high spenders. That is why I hoped that amendment No. 16, had it been reached, would be accepted by my right hon. Friend. I still hope to hear him say that the principles embodied in that amendment will be in the amendment that he will introduce in another place.
I shall not stick to the de minimis argument because that is an issue of convenience and not of principle, but on targets I must stick. I repeat that it is bizarre and inappropriate to apply rate capping because a local authority has a history of low expenditure rather than of high expenditure. As the targets are based solely on historic expenditure postures, my right hon. Friend has missed the point. He will have done so unless he accepts that there should be an exclusive filter in part II as in part I, and that as long as it is below GRE the authority will escape rate capping and target considerations.
I advise my right hon. Friend that many of his hon. Friends have become confused because they do not realise that "expenditure guidance", the words which appear in amendment No. 39, mean "target". I know that there is confusion because I have talked to many of my hon. Friends. Moreover, it is possible to read through the 1980 Act without realising that the two words mean "target". One does not discover that "expenditure guidance" means "target" until reading the 1982 Act and applying it to section 59 of the 1980 Act. That is why many hon. Members have not realised that amendment No. 39 does not meet the urgent need of equity. That is why we need to hear my right hon. Friend say that the filter which is embodied in amendment No. 16 will be introduced in another place.
It is possible that their Lordships, who show a commendable degree of independence in matters of this sort, will see the logic of embodying the filter in legislation and will do that themselves, even if the proposal is not contained in the ministerial brief. I hope that we shall not have to depend upon that.

Mr. Patrick Jenkin: I intervene because I sense that we are approaching the end of the debate. I have said that I hope that after a year or two's experience with part I we shall eventually be able to dispense with targets altogether. Secondly, I said that I had taken note of the amendment of my hon. Friend the Member for Honiton (Sir P. Emery) and that in seeking to frame an amendment to be tabled in another place I would take account of what he said.

Mr. Maxwell-Hyslop: I was not sure whether that meant that my right hon. Friend was giving an undertaking that the contents of the amendment would be embodied in the amendment that he intends to introduce in another place. So often in this place Ministers tell their hon. Friends on the Back Benches that they will take account of what has been said. However, when they come to deliver it is a baby of a different configuration, so much so that its parents are left in doubt about its paternity and motherhood.
There is the serious constitutional question whether another place is the right place to introduce that which my right hon. Friend has in mind. Clause 2(3) states:
subject to annulment in pursuance of a resolution of the House of Commons.
There is no reference to a resolution of either House of Parliament. I chose my words carefully in the amendment which will not be reached, No. 16, and took them from my right hon. Friend's drafting in part I. That is why it refers to only the House of Commons and not to both Houses of Parliament.
I advise my right hon. Friend that he has given even greater reason for accepting the proposition that I have advanced. If he is to get rid of targets anyway, why have targets pushed into the filter? Imperfect instrument as GRE is, it should be the relevant filter in this context. It is the expectation of my right hon. Friend's Back Benchers in large measure that that is the form that the amendment which will come back to the House from another place will take.

Mr. Peter Hordern: I do not agree with those who claim that it is unconstitutional to keep local authority expenditure in check. The truth is that some local authorities have consistently increased their expenditure far beyond what the country can afford. Although I have listened very carefully to my right hon. and learned Friend the Member for Hexham (Mr. Rippon) and the hon. Member for Bootle (Mr. Roberts), and agree with them about the concept of the independence of local authorities, I take it that they also believe that, overall, the Government must have central control over the total volume of expenditure.
The late Anthony Crosland's party—his 1976 speech in which he said "the party is over" was mentioned by the hon. Member for Bootle—has never stopped for some local authorities, but other, low-spending authorities, including Essex and West and East Sussex, have never been at that party and do not know what a party is like.

Mr. Straw: rose—

Mr. Hordern: I shall not give way, as there is not enough time.
I, like many of my hon. Friends, am concerned about Part II, because there may be occasion for it, which is what the hon. Member for Blackburn believes, too. It is true that the volume of local authority expenditure since 1979 and 1983 has increased by about 9 per cent., which is rather more than the increase in Government expenditure as a whole.

Mr. Straw: rose—

Mr. Hordern: I really cannot give way to the hon. Gentleman, as I have only four minutes to speak in the debate.
Local authority spending has increased as against Government expenditure mainly because Government

expenditure in areas such as housing has been greatly reduced. If it is right to criticise local authority expenditure increases of 9 per cent., it must be pointed out that National Health Service expenditure has increased much more in the same period. I believe that in many cases there is more scope for reduction in public expenditure by the Government than by local authorities.
More and more services will be transferred from Government to local authorities as time goes on, and that will make the problem more grievous. For example, there will be many more over-75s in the next 10 years or so and society must be responsible for that ageing population. And the government rightly wish to transfer many responsibilities to local authorities, but that will not be accomplished by the authorities without great difficulty.
I have noticed, as have Opposition Members and other Conservative Members, that public expenditure levels for local authorities over the next 10 years will be markedly lower than those forecast for the Government, so there will be considerable difficulties for local authorities in the next three to 10 years. I hope that it will not be necessary to introduce part II at any time. There will be great strains upon local authorities, which is why it is essential to have some objective assessment in the Bill that low-spending authorities know that they can meet.
It is intolerable that a general power should be used to support the subjective judgment of the Secretary of State of the day, who may say that a local authority, no matter how responsible it has been, should further reduce its expenditure. The low-spending authorities that are represented by many of my right hon. and hon. Friends who are taking part in the debate have already been cut far below the quick. Why, I am told that the lawns at West Sussex county hall are watered by the chairman of the policy and general purposes committee, and I should not be surprised at that. There is no scope for further reductions in authorities such as West or East Sussex.
I ask the Secretary of State to make certain that, when his amendments go to another place, they will be objective and that the criteria especially will show, and be based on the relationship between the expenditure of low-spending authorities and the GREA that has been put upon them. I ask my right hon. Friend to take no notice in this formula, of the targets that local authorities may have broken unwittingly in the past year or so, to keep up the standard of statutory services that the Government have imposed upon them.

Question put, That the amendment be made:—

The House divided: Ayes 202, Noes 304.

Division No. 210]
[7.14 pm


AYES


Alton, David
Bidwell, Sydney


Anderson, Donald
Blair, Anthony


Archer, Rt Hon Peter
Boothroyd, Miss Betty


Ashdown, Paddy
Boyes, Roland


Ashley, Rt Hon Jack
Bray, Dr Jeremy


Ashton, Joe
Brown, Gordon (D'f'mline E)


Atkinson, N. (Tottenham)
Brown, Hugh D. (Provan)


Bagier, Gordon A. T.
Brown, N. (N'c'tle-u-Tyne E)


Banks, Tony (Newham NW)
Brown, Ron (E'burgh, Leith)


Barnett, Guy
Bruce, Malcolm


Barron, Kevin
Buchan, Norman


Beaumont-Dark, Anthony
Callaghan, Jim (Heyw'd &amp; M)


Beckett, Mrs Margaret
Campbell, Ian


Beith, A. J.
Campbell-Savours, Dale


Benn, Tony
Canavan, Dennis


Bennett, A. (Dent'n &amp; Red'sh)
Carter-Jones, Lewis


Bermingham, Gerald
Cartwright, John






Clark, Dr David (S Shields)
Lofthouse, Geoffrey


Clarke, Thomas
McCartney, Hugh


Clay, Robert
McCusker, Harold


Cocks, Rt Hon M. (Bristol S.)
McGuire, Michael


Cohen, Harry
McKay, Allen (Penistone)


Coleman, Donald
McKelvey, William


Concannon, Rt Hon J. D.
Mackenzie, Rt Hon Gregor


Conlan, Bernard
McNamara, Kevin


Cook, Frank (Stockton North)
McTaggart, Robert


Corbett, Robin
McWilliam, John


Corbyn, Jeremy
Madden, Max


Cormack, Patrick
Marek, Dr John


Cowans, Harry
Marshall, David (Shettleston)


Cox, Thomas (Tooting)
Martin, Michael


Craigen, J. M.
Mason, Rt Hon Roy


Critchley, Julian
Maxton, John


Crowther, Stan
Maynard, Miss Joan


Cunliffe, Lawrence
Meacher, Michael


Cunningham, Dr John
Meadowcroft, Michael


Davies, Rt Hon Denzil (L'lli)
Meyer, Sir Anthony


Davies, Ronald (Caerphilly)
Michie, William


Davis, Terry (B'ham, H'ge H'l)
Mikardo, Ian


Deakins, Eric
Millan, Rt Hon Bruce


Dixon, Donald
Miller, Dr M. S. (E Kilbride)


Dobson, Frank
Mitchell, Austin (G't Grimsby)


Dubs, Alfred
Molyneaux, Rt Hon James


Dunwoody, Hon Mrs G.
Morris, Rt Hon J. (Aberavon)


Eadie, Alex
Morrison, Hon C. (Devizes)


Eastham, Ken
Nellist, David


Ellis, Raymond
Nicholson, J.


Evans, John (St. Helens N)
Norris, Steven


Fatchett, Derek
O'Brien, William


Faulds, Andrew
O'Neill, Martin


Field, Frank (Birkenhead)
Orme, Rt Hon Stanley


Fisher, Mark
Patchett, Terry


Flannery, Martin
Pavitt, Laurie


Foot, Rt Hon Michael
Pendry, Tom


Forrester, John
Penhaligon, David


Foster, Derek
Pike, Peter


Fraser, J. (Norwood)
Powell, Rt Hon J. E. (S Down)


Freeman, Roger
Powell, Raymond (Ogmore)


Freeson, Rt Hon Reginald
Prentice, Rt Hon Reg


Freud, Clement
Prescott, John


Garrett, W. E.
Randall, Stuart


George, Bruce
Rees, Rt Hon M. (Leeds S)


Gilmour, Rt Hon Sir Ian
Richardson, Ms Jo


Godman, Dr Norman
Rippon, Rt Hon Geoffrey


Gould, Bryan
Roberts, Allan (Bootle)


Hamilton, James (M'well N)
Roberts, Ernest (Hackney N)


Hardy, Peter
Robertson, George


Harman, Ms Harriet
Robinson, G. (Coventry NW)


Harrison, Rt Hon Walter
Ross, Ernest (Dundee W)


Hart, Rt Hon Dame Judith
Ross, Wm. (Londonderry)


Hattersley, Rt Hon Roy
Ryman,John


Haynes, Frank
Sedgemore, Brian


Healey, Rt Hon Denis
Sheerman, Barry


Heffer, Eric S.
Sheldon, Rt Hon R.


Hogg, N. (C'nauld &amp; Kilsyth)
Shore, Rt Hon Peter


Holland, Stuart (Vauxhall)
Short, Ms Clare (Ladywood)


Home Robertson, John
Short, Mrs H.(W'hampt'n NE)


Howell, Rt Hon D. (S'heath)
Silkin, Rt Hon J.


Howells, Geraint
Skinner, Dennis


Hughes, Dr. Mark (Durham)
Smith, C.(Isl'ton S &amp; F'bury)


Hughes, Robert (Aberdeen N)
Smith, Rt Hon J. (M'kl'ds E)


Hughes, Roy (Newport East)
Snape, Peter


Hughes, Sean (Knowsley S)
Soley, Clive


Hughes, Simon (Southwark)
Spearing, Nigel


John, Brynmor
Steel, Rt Hon David


Johnston, Russell
Strang, Gavin


Jones, Barry (Alyn &amp; Deeside)
Straw, Jack


Kaufman, Rt Hon Gerald
Thomas, Dafydd (Merioneth)


Kennedy, Charles
Thomas, Dr R. (Carmarthen)


Kilroy-Silk, Robert
Thompson, J. (Wansbeck)


Kirkwood, Archibald
Thorne, Stan (Preston)


Knox, David
Tinn, James


Lambie, David
Torney, Tom


Lewis, Ron (Carlisle)
Wainwright, R.


Lewis, Terence (Worsley)
Wallace, James


Litherland, Robert
Wardell, Gareth (Gower)


Lloyd, Tony (Stretford)
Weetch, Ken





Welsh, Michael
Woodall, Alec


White, James
Young, David (Bolton SE)


Wigley, Dafydd



Williams, Rt Hon A.
Tellers for the Ayes:


Winnick, David
Mr. W. Benyon and Mr. David Lightbown.


Winterton, Nicholas





NOES


Adley, Robert
Emery, Sir Peter


Aitken, Jonathan
Evennett, David


Alexander, Richard
Eyre, Sir Reginald


Alison, Rt Hon Michael
Fallon, Michael


Amery, Rt Hon Julian
Farr, John


Ancram, Michael
Favell, Anthony


Arnold, Tom
Fenner, Mrs Peggy


Ashby, David
Finsberg, Sir Geoffrey


Aspinwall, Jack
Fletcher, Alexander


Atkins, Robert (South Ribble)
Fookes, Miss Janet


Atkinson, David (B'm'th E)
Forman, Nigel


Baker, Rt Hon K. (Mole Vall'y)
Forsyth, Michael (Stirling)


Baker, Nicholas (N Dorset)
Forth, Eric


Baldry, Anthony
Fowler, Rt Hon Norman


Banks, Robert (Harrogate)
Fox, Marcus


Batiste, Spencer
Fraser, Peter (Angus East)


Bellingham, Henry
Fry, Peter


Bendall, Vivian
Gale, Roger


Bennett, Sir Frederic (T'bay)
Galley, Roy


Berry, Sir Anthony
Gardiner, George (Reigate)


Best, Keith
Gardner, Sir Edward (Fylde)


Bevan, David Gilroy
Garel-Jones, Tristan


Biffen, Rt Hon John
Glyn, Dr Alan


Biggs-Davison, Sir John
Goodhart, Sir Philip


Blaker, Rt Hon Sir Peter
Goodlad, Alastair


Body, Richard
Gorst, John


Bonsor, Sir Nicholas
Gow, Ian


Bottomley, Peter
Gower, Sir Raymond


Boyson, Dr Rhodes
Grant, Sir Anthony


Braine, Sir Bernard
Greenway, Harry


Brandon-Bravo, Martin
Gregory, Conal


Bright, Graham
Griffiths, E. (B'y St Edm'ds)


Brinton, Tim
Griffiths, Peter (Portsm'th N)


Brittan, Rt Hon Leon
Grist, Ian


Brown, M. (Brigg &amp; Cl'thpes)
Ground, Patrick


Browne, John
Grylls, Michael


Bryan, Sir Paul
Gummer, John Selwyn


Buck, Sir Antony
Hamilton, Hon A. (Epsom)


Budgen, Nick
Hamilton, Neil (Tatton)


Burt, Alistair
Hampson, Dr Keith


Butler, Hon Adam
Hannam, John


Butterfill, John
Harris, David


Carlisle, John (N Luton)
Harvey, Robert


Carlisle, Kenneth (Lincoln)
Hawkins, Sir Paul (SW N'folk)


Carttiss, Michael
Hawksley, Warren


Chalker, Mrs Lynda
Hayes, J.


Channon, Rt Hon Paul
Hayhoe, Barney


Chapman, Sydney
Hayward, Robert


Chope, Christopher
Heathcoat-Amory, David


Churchill, W. S.
Heddle, John


Clark, Dr Michael (Rochford)
Henderson, Barry


Clark, Sir W. (Croydon S)
Hickmet, Richard


Clegg, Sir Walter
Higgins, Rt Hon Terence L.


Cockeram, Eric
Hill, James


Colvin, Michael
Hind, Kenneth


Conway, Derek
Hirst, Michael


Coombs, Simon
Hogg, Hon Douglas (Gr'th'm)


Cope, John
Holland, Sir Philip (Gedling)


Corrie, John
Holt, Richard


Couchman, James
Hooson, Tom


Cranborne, Viscount
Hordern, Peter


Crouch, David
Howard, Michael


Currie, Mrs Edwina
Howarth, Gerald (Cannock)


Dickens, Geoffrey
Howell, Rt Hon D. (G'ldford)


Dorrell, Stephen
Howell, Ralph (N Norfolk)


Douglas-Hamilton, Lord J.
Hubbard-Miles, Peter


Dover, Den
Hunt, David (Wirral)


du Cann, Rt Hon Edward
Hunt, John (Ravensbourne)


Dunn, Robert
Hunter, Andrew


Durant, Tony
Hurd, Rt Hon Douglas


Edwards, Rt Hon N. (P'broke)
Irving, Charles


Eggar, Tim
Jackson, Robert






Jenkin, Rt Hon Patrick
Proctor, K. Harvey


Jessel, Toby
Rathbone, Tim


Johnson-Smith, Sir Geoffrey
Renton, Tim


Jones, Gwilym (Cardiff N)
Ridley, Rt Hon Nicholas


Jones, Robert (W Herts)
Ridsdale, Sir Julian


Jopling, Rt Hon Michael
Roberts, Wyn (Conwy)


Kellett-Bowman, Mrs Elaine
Robinson, Mark (N'port W)


Kershaw, Sir Anthony
Roe, Mrs Marion


King, Roger (B'ham N'field)
Rossi, Sir Hugh


King, Rt Hon Tom
Rost, Peter


Knight, Gregory (Derby N)
Rowe, Andrew


Knight, Mrs Jill (Edgbaston)
Rumbold, Mrs Angela


Knowles, Michael
Ryder, Richard


Lamont, Norman
Sackville, Hon Thomas


Lang, Ian
Sainsbury, Hon Timothy


Lawler, Geoffrey
Sayeed, Jonathan


Lawrence, Ivan
Shaw, Giles (Pudsey)


Lawson, Rt Hon Nigel
Shaw, Sir Michael (Scarb')


Leigh, Edward (Gainsbor'gh)
Shelton, William (Streatham)


Lennox-Boyd, Hon Mark
Shepherd, Colin (Hereford)


Lester, Jim
Shepherd, Richard (Aldridge)


Lilley, Peter
Silvester, Fred


Lloyd, Ian (Havant)
Sims, Roger


Lloyd, Peter, (Farehaw)
Skeet, T. H. H.


Lord, Michael
Smith, Sir Dudley (Warwick)


McCrindle, Robert
Smith, Tim (Beaconsfield)


McCurley, Mrs Anna
Soames, Hon Nicholas


MacGregor, John
Spencer, Derek


MacKay, Andrew (Berkshire)
Spicer, Jim (W Dorset)


MacKay,'John (Argyll &amp; Bute)
Spicer, Michael (S Worcs)


Maclean, David John
Squire, Robin


McQuarrie, Albert
Stanbrook, Ivor


Major, John
Stanley, John


Malins, Humfrey
Steen, Anthony


Malone, Gerald
Stern, Michael


Marland, Paul
Stevens, Lewis (Nuneaton)


Marlow, Antony
Stevens, Martin (Fulham)


Maude, Hon Francis
Stewart, Allan (Eastwood)


Maxwell-Hyslop, Robin
Stewart, Ian (N Hertf'dshire)


Mellor, David
Stokes, John


Merchant, Piers
Stradling Thomas, J.


Miller, Hal (B'grove)
Sumberg, David


Mills, Iain (Meriden)
Tapsell, Peter


Mills, Sir Peter (West Devon)
Taylor, John (Solihull)


Miscampbell, Norman
Taylor, Teddy (S'end E)


Mitchell, David (NW Hants)
Tebbit, Rt Hon Norman


Moate, Roger
Temple-Morris, Peter


Monro, Sir Hector
Terlezki, Stefan


Montgomery, Fergus
Thatcher, Rt Hon Mrs M.


Moore, John
Thomas, Rt Hon Peter


Morris, M. (N'hampton, S)
Thompson, Donald (Calder V)


Morrison, Hon P. (Chester)
Thompson, Patrick (N'ich N)


Moynihan, Hon C.
Thornton, Malcolm


Mudd, David
Thurnham, Peter


Murphy, Christopher
Townend, John (Bridlington)


Neale, Gerrard
Townsend, Cyril D. (B'heath)


Needham, Richard
Tracey, Richard


Nelson, Anthony
Twinn, Dr Ian


Neubert, Michael
van Straubenzee, Sir W.


Newton, Tony
Vaughan, Sir Gerard


Nicholls, Patrick
Viggers, Peter


Onslow, Cranley
Wakeham, Rt Hon John


Oppenheim, Philip
Waldegrave, Hon William


Oppenheim, Rt Hon Mrs S.
Walden, George


Osborn, Sir John
Walker, Bill (T'side N)


Ottaway, Richard
Waller, Gary


Page, John (Harrow W)
Ward, John


Page, Richard (Herts SW)
Wardle, C. (Bexhill)


Parris, Matthew
Watson, John


Patten, John (Oxford)
Watts, John


Pattie, Geoffrey
Wells, Bowen (Hertford)


Pawsey, James
Wells, John (Maidstone)


Peacock, Mrs Elizabeth
Wheeler, John


Pink, R. Bonner
Whitfield, John


Pollock, Alexander
Whitney, Raymond


Porter, Barry
Wiggin, Jerry


Powell, William (Corby)
Wilkinson, John


Powley, John
Wolfson, Mark


Price, Sir David
Woodcock, Michael


Prior, Rt Hon James
Yeo, Tim





Young, Sir George (Acton)
Tellers for the Noes:


Younger, Rt Hon George
Mr. Carol Mather and Mr. Robert Boscawen.

Question accordingly negatived.

Clause 13

DUTY TO CONSULT INDUSTRIAL AND COMMERCIAL RATEPAYERS

Mr. Chris Smith: I beg to move amendment No. 21, in page 9, line 30, at end insert
'and the Receiver for the Metropolitan Police District.'.
This amendment addresses itself to the specific problem of the Metropolitan police and their surprising exclusion from the provisions of clause 13. The amendment seeks to require the Metropolitan police, along with all other rating authorities, to consult commercial and industrial ratepayers in the same way that all other local authorities are required to under the Bill. It is worth stating that under the Bill as at present drafted there is just one item of rate and grant-borne expenditure in the entire country that is not subject to statutory consultation with business ratepayers.
7.30 pm
That sole item is police expenditure in London. Unlike all other forms of local authority expenditure, police expenditure is excluded from the process of consultation furthermore, because the police authority for the London area is the Home Secretary, whereas in other parts of the country the police authorities are locally accountable, London will be the only police authority that is not required to consult the ratepayers. Other police authorities are required by clause 13 to consult. The amendment seeks to add the Metropolitan police to the list of authorities that are required to consult under the Bill.
There are two main reasons for the amendment. The first is accountability, which should be a simple matter. At present the Metropolitan police are accountable only to the Home Secretary. They are not accountable to the ratepayers of London. I would like to see the Metropolitan police become accountable to the ratepayers. Meanwhile, the next best thing is to require them, in setting their expenditure, to have some degree of consultation with the ratepayers of London especially as the Metropolitan police are far and away the most expensive police authority in the country per person served and per policeman employed. They cost at least twice as much as the average urban police authority.
In this instance, it is only the commercial and industrial ratepayers that we seek to include. I should have thought that that point would commend itself to the Government. A requirement for some consultation would widen the base of accountability. At the moment, there is no accountability to the people of London except a technical accountability through the answerability of the Home Secretary to Parliament.
The second argument is more important. In Committee, whenever we discussed the cost of the policing operations in London and the needs of London for effective policing, the Government always said that they recognised London's special need for expenditure on policing that was far above the norm for other urban areas. They accepted the fact that London has a special policing need and


therefore a special need for expenditure on policing. I would not quarrel with that argument. I recognise that London has a special need in that respect. As a capital city and as—especially in the case of inner London—an area of massive deprivation, London has special problems.
However, it is strange that, although the Government are quite prepared to accept that argument in the case of the Metropolitan police, they are not prepared to accept it as it relates to other forms of local authority expenditure. Under the terms of the Bill, local authorities that spend more than the average urban area on social services, the provision of libraries or any other service are criticised by the Government. However, the Metropolitan police, who are spending more and producing less in terms of efficiency than other local authority services, are praised rather than criticised. Why are the Government prepared to apply those arguments about special need to the Metropolitan police but not prepared to accept them in relation to education, social services or any other local authority service?
At the moment, the Metropolitan police are not obliged to justify their expenditure to anyone other than the Home Secretary. They have a wonderful system that other local authorities, both Labour and Conservative, would dearly love to share. Their expenditure automatically equals their grant-related expenditure assessment. The Metropolitan police cannot go above or below the GRE, because GRE equals expenditure. Bearing that in mind, the Metropolitan police have a special duty to consult the ratepayers of London in a proper fashion.
There is, under the Bill, a process of consultation not with domestic ratepayers but with commercial and industrial ratepayers. Surely—at the very least—the Metropolitan police should be obliged to consult those interests like any other authority. If the police consult those interests they may become more open and more responsive about their expenditure, the efficiency of their operation and their policing decisions.
We challenge the Government to examine the arguments about the cost of policing in London and the needs of London as a capital city and an area of considerable deprivation, and to acknowledge that what is only right and proper for other local authorities should surely be right for this very expensive element of expenditure in our capital city. I hope that the Government will address themselves to those issues.

Mr. Waldegrave: Amendment No. 21 is a bit of a try-on. Those hon. Members who did not have the pleasure of spending 115 hours in Committee with the hon. Member for Islington, South and Finsbury (Mr. Smith), as I did, will have to take it from me that the subject of the Metropolitan police was brought up time after time, when Opposition Members could not think of anything else to talk about. They had one point which at first sight seemed to have substance. That point concerned the unusually expensive nature of policing in London. Opposition Members suggested that the same was true of ILEA. Labour Members also used the point to indulge in a few digs at the Metropolitan police. The hon. Member for Islington, South and Finsbury was more restrained in that line than his colleagues, but I regret that he found it necessary to join in. I do not believe that the House accepts the criticism of the Metropolitan police that we have just heard, even though the hon. Gentleman's criticism is more muted than that of some of his hon. Friends.
The "parallel" is not a parallel. The Metropolitan police and the Receiver for the Metropolitan Police District are directly accountable to the House. They are directly accountable to the Home Secretary who is responsible for their budget. The democratic control that the hon. Gentleman rightly requires is exercised by my right hon. and learned Friend the Home Secretary, to the House. We should be introducing a peculiar anomaly if we imposed on him a requirement to consult only one section of the community, as the hon. Gentleman acknowledged —ratepayers in London — rather than to answer to the House.

Mr. Chris Smith: Does the Under-Secretary of State accept that the purpose of amendment No. 21 is to say that a second best is better than nothing at all? My ideal would be for the police authority to be directly accountable to the electorate through local authorities in London but as that does not come within the Bill's scope the second best is to seize on the processes of consultation that do exist under the Bill and say that they should apply to the Metropolitan police.

Mr. Waldegrave: I see the hon. Gentleman's argument but to introduce into clear and direct accountability a form of consultation that is designed for local authorities would make confused and unclear what is, at the moment, clear. All ratepayers must know the effect of the Metropolitan police precept. It is provided for in the rate demands rules, which require that the poundages of each precepting authority are shown on the rate demand. We shall be introducing new rules with effect from 1985–86 to ensure that the effect of each major precept, including that for the Receiver for the Metropolitan District Police, is spelt out in terms of the individual's rate bill. Clause 14 ensures that that information will go to all ratepayers, including council tenants and others who do not pay rates direct. This will ensure that both domestic and non-domestic ratepayers ace aware of the consequences of the precept levied by the receiver.
The hon. Gentleman's other argument, which became familiar in Committee, is that if it is right for the Metropolitan police to spend more than other police authorities, why is it not right that the Inner London education authority and other high-spending Labour-controlled authorities in London should spend more than authorities that run similar services elsewhere? At first sight, that seems a good argument but it does not bear close analysis. In regard to ILEA and other councils such as Islington, we try to take account, through the GREs, of the differential costs in London. The hon. Gentleman and I have debated that matter for many weary hours.
The Metropolitan police perform services for the entire country. That is not the case with ILEA or Islington council, although I do not doubt that the latter has a wide-ranging foreign policy. However, it is not commonly thought to offer services outside its area. The Metropolitan police provide the special branch and bear the heavy burden of diplomatic protection and protection of the royal palaces. They receive something called the imperial and national services grant from the Government — a new element of our national finances to me —which contributes to those costs. Those functions partly explain the Metropolitan police's high costs. Moreover, the force pays for many more of its support services than do others.


They include property services, transport, communications, computers, catering and payrolls. Such costs are often carried by the local authority in provincial forces. It is estimated that for the Metropolitan police they are well above £100 million a year.
7.45 pm
I hope that the factors that I have outlined will convince the House that a comparison between the Metropolitan police and other forces in terms of expenditure is not real as it ignores the load of work associated with policing the capital, such as demonstrations and terrorism. When we debated this matter in Committee the Christmas terrorist wave was fresh in our memories as was the huge police operation that the Metropolitan police had to put on. Such functions are reflected in the higher ratio of police officers to population in London—there is one officer for every 268 people in London as opposed to one for every 458 people in the rest of England and Wales.
The long established system of the Home Secretary being the police authority for London has served the country and the capital well. I would not want to recommend that the House makes any changes. The Home Secretary comes before the House and is accountable for the Metropolitan police. That system works perfectly well. The hon. Gentleman passed lightly over his criticism of the Metropolitan police, but I am sure many right hon. and hon. Members do not want to leave this short debate with that taste in their mouths. I am sure that most of us accept that the Metropolitan police's work is of a high standard, and admire it. I hope that I have said enough to convince my right hon. and hon. Friends that there is little in the amendment and that, if the hon. Gentleman presses it to a Division, they will reject it. However, I hope that he will be persuaded not to go that far.

Question put and negatived.

Clause 15

MISCELLANEOUS AMENDMENTS AND REPEALS

Mr. Teddy Taylor: I beg to move amendment No. 41, in page 11, line 2 at end insert—
.(2A) Schedule 3 to this Act shall have effect with respect to the rating of agricultural buildings.
In applying rates to any agricultural buildings under this Schedule, rating authorities shall charge rates according to the following formula—

Rateable year
Derating percentage


1985–86
80


1986–87
60


1987–88
40


1988–89
20


1989–90
nil

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take amendment No. 40, new Schedule 3—Rating of Agricultural Buildings.

Mr. Taylor: Time is short because of the guillotine, but I propose briefly to explain the reasons for amendment No. 41 and I hope that, if he is able to catch your eye, Mr. Deputy Speaker, my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) will be able to explain some of the broader thinking behind it.
The amendments would end, over a five-year period, unjustified and illogical circumstances by which agriculture alone makes no contribution to local government expenditure for its buildings. It is an anomaly of which many people are unaware and it cannot be justified on any logical grounds. Various types of derating has existed since 1896 but it was in 1929 that legislation was introduced wholly to exempt agriculture for contributing in respect of land or buildings. At the time it was interpreted as a small concession to take account of agriculture's serious plight. It was rightly said that the Government had no power to do anything to protect agriculture against a serious world recession and that this was the only small available item. There was no broad system of agricultural support and agriculture faced serious problems.
Things have changed dramatically. Whereas rates on industry were low, they are now a substantial burden. We have heard from the Confederation of British Industry and firms in our constituencies how many of them are battling for survival because of the burden of rates. Agricultural buildings tended to be relatively unsophisticated in 1929, but their quality has improved and their quantity has increased. Moreover, since 1929 we have had, through case law, a major extension in the concession, and legislation of 1971 extended the exemption to offices of agricultural co-operatives. Every industry has to pay substantial rates irrespective of whether they can afford to do so, but agriculture does not have to pay a penny. I am not expressing a view held only by my hon. Friend the Member for Aldridge-Brownhills and I. My hon. Friend the Minister must be aware that every independent committee and study group that has examined the matter has said that the anomaly should be ended speedily. We had, for example, the Layfield Royal Commission on local government, which looked at the whole issue very carefully. It concluded that there were no grounds for exempting agricultural land or buildings from carrying a share of rates.
We are talking not about pennies but about a great deal of money. There have been various estimates of what agricultural rating might produce. An example given in a written question some four years ago showed that the rateable value of land and buildings was about £200 million. As most of these are in the shire counties that would mean about £300 million in cash. Layfield indicated that perhaps farm buildings would account for some £130 million. The Economist magazine said that the amount of rates was about £400 million. But all of those are just estimates because, as the buildings have not been rated, we can only make a rough guess.
However, I think that the Minister would accept that it could amount to perhaps £200 million to £250 million for local authorities, which is a lot of money. We have been discussing under the Bill the enormous problems of local authorities in making ends meet, and the Government are short of money. Not only would it ensure more revenue for local authorities but it would take some of the enormous burden off the rest of industry, because any exemption for one part of industry inevitably means that others pay more.
When this was raised once in the past a Minister said that it would not help local authorities because if their rateable values were increased their Government grants would be cut. I am sure that the Minister is well aware that if there was a substantial change in rateable values it would


be very difficult for any Government to argue that none of the benefit should go to the local authorities. Even if the Government were hard-nosed enough to say that, at least it would be a major benefit to the Exchequer.
It has been argued that, as this derating has existed since 1929, there is no reason to do anything about it now. One of the reasons for that was the rather dramatic speech made by the Secretary of State for the Environment at a party conference in Blackpool, in which he said—to the surprise, I think, of many people—that the reform of the rating system would not happen.
Many of us on the Conservative Benches have argued for the reform of the rating system. There was a time some elections ago when, in our party manifesto, we made the astonishing proposal that we should abolish rates for domestic properties only, which would have placed local authorities in the unusual situation of levying rates for industry, while the ordinary domestic owners would pay none. I would like all rates abolished, but now that the Government have concluded—and they are very wise and have access to information which I do not have—that we cannot change or abolish the rating system, it seems wrong for this anomaly to continue.
What are the arguments against removing this derating? One is that it would create a major change in the finances of agriculture. Obviously, if we are talking about £150 million to £200 million, that is a large sum. That is why, in this amendment, in an attempt to get the full support of the Government, as I hope we shall tonight, we have suggested that rating should be introduced over a five-year period—that there should be derating of 80 per cent. in the first year, going down to nil in 1990. So to that extent we deal with the question of its being phased in.
The second argument is that it would be unpopular. Understandably, such an important and efficient industry as agriculture carries a lot of clout. We are dealing not just with the agriculture industry, but, to some degree, with the whole City of London, because a number of institutions and pension funds have almost a vested interest in keeping agricultural land at an unreasonably high price. It would probably be an unpopular move with a lot of people. On the other hand, it would mean a reduction in the rating burden carried by others.
The third issue is to consider what we can afford. Rates for industry have never taken any account of what industry can afford. We know that many firms in our constituencies are having to pay in rates enormous sums that they cannot afford. Not only may they not be making profits, they may be making substantial losses, yet they still have to pay their rates. It is unreasonable to suggest that it should be said only of farmers that if they cannot afford to pay they should not do so. Indeed, there are some reasons for thinking that certainly in recent years agriculture has performed financially slightly better than the rest of industry because it has had the enormous, high support, the protection, of very substantial levies, which in some cases are over 100 per cent., as a form of tariff protection, compared with about 7 or 8 per cent. for the rest of industry. Also, with the exception of items such as sugar, they have had more or less a guarantee that anything produced would be purchased at a relatively high price.
This, of course, has created the rather unusual situation whereby, since the Government came to power — I found to my horror only yesterday — exports by the Common Market to the Soviet Union of cheap, subsidised food have increased 600 per cent. We are now selling

about 100,000 tonnes of food every week at knockdown prices to the Soviet Government to help boost its economy. Sadly, the Russian people do not get the food at cheap prices. It is taken by central purchasing and, of course, the Russian Government make the profit, which will no doubt help them to finance their defence spending.
It is an indication of what happens when we interfere with the natural disciplines of the market. The Government are now facing the appalling problem of what to do about the Common Market, which has huge mountains of surplus food that nobody wants and is exporting massive amounts to Soviet Russia at knockdown prices. It is an indication of what happens— whether the Government are Conservative or Labour— when we interfere with the natural disciplines of the economy and try to force unreasonable subsidies where they are not justified.
It is therefore also in the national interest that we decide that agriculture should be treated exactly the same as any other industry. What could be fairer?
I was quite encouraged to read in the papers only about two weeks ago that the Government were undertaking an inquiry into support for agriculture, including agricultural derating. It seemed to be some kind of official statement or comments because every newspaper carried it at the same time. These things usually come from guidance of some sort—not a leak, because leaks are very few and far between. I am told that guidance can be given, and the papers pick it up and all publish the same story. Then it seemed that there was a great deal of discussion, a lot of flapping, and lots of organisations were making telephone calls and seeing their Members of Parliament — and suddenly we found the Prime Minister, for whom I have the greatest admiration, saying in the House on 23 February
that contrary to reports we do not propose to re-open the question of rating agricultural land and buildings."—[Official Report, 23 February 1984; Vol. 54, c. 972.]
That certainly came as a shock to me, because it seemed to be some kind of policy re-think.
In the very short time available we cannot have a full debate and I am not expecting the Government —although I hope that they will—to announce this major change of policy. But, if the Prime Minister says they are not going to do it now, could they give us some indication when this grotesque and absurd anomaly might be reviewed? Could they, for example, say that a committee might be appointed to look at it in 10 years, or 20 years, or 30 years, or something like that?
We have had this ludicrous anomaly, which is unfair to every other ratepayer in Britain, who is having to pay more rates because agriculture pays none. It is shocking, it is shameful and it is unfair. Firms are being forced to close on the margin. We know that some firms go bust, not because they are losing millions but because they cannot pay a bill of £200. Efficient firms employing good British workers and run by good British managers are being put out of business because of rates. And some of that on the margin is because of this ludicrous anomaly concerning agriculture.
I know that some of my hon. Friends argue that if this is hitting industry so hard there is no point in doing the same to agriculture. I should be very happy if the Government were to say that they were going to abolish rates, because they are a negative tax which has no relation to the ability to pay. But the Government told us only 10


days ago, to my shock and horror, that they will not reform rates, that rates will carry on for ever. So, if rates are going to carry on for ever, let us remove the anomalies from the system. Let us get rid of agricultural derating in a sensible way, over a five-year period, and end an injustice which is not only unfair and illogical but is also an unnecessary burden on every other domestic, commercial and industrial ratepayer.
I know that the Minister who will reply is an honourable man who cares about people, justice and principles. For that reason, I am confident that he will give us some hope that there will be reconsideration of a policy which is an outrage to any logical, just mind.

8 pm

Mr. Richard Shepherd: I support the amendments, because, as my hon. Friend the Member for Southend, East (Mr. Taylor) said, they involve a matter of equity. The great majority of our people are employed in industry, commerce and trade and they support all the services and facilities through the normal taxation system.
Why, then, do a Conservative Government, who profess to believe in equality of treatment in law and tax matters for all citizens, have a blind eye in respect of the taxation or rating of farm land? I should like us to be able to refute that suggestion, because I believe that the Conservative party represents the broad interests of all our people.
However, when we say, "We shall rate 99 per cent. of the places of employment of our population, but not rate one particular section," we are saying that there is a privileged part of the community which, whether in good times or in times of adversity, does not pay its contribution to the services provided in rural communities. I feel strongly about that. The historical reasons for the derating of agriculture were sufficient in their day, but they are no longer sufficient.
Reports on the financing of agriculture show that support and subsidies from the Exchequer and the CAP total about £20,000 a year per farmer or 12,000 per farm employee. My constituency is in the west midlands, which has suffered a severe recession. Our factories have been required to pay rates, whether or not they were making profits. Many small businesses and some large firms have had to cease operations and lay off people because of the rates burden. Yet farms and farmland are a privileged and protected part of the community which has not had to bear its share of general expenditure.
The amendment proposes a big structural change for agriculture. It would obviously have to be phased in, but there is no justifiable reason for supporting the existing anomaly. I urge the Government, as a matter of equity, to consider the proposal in the amendment. We would come out as a stronger party and a stronger Government by treating equally the work places of our citizens. I know that some sectors face difficulties, but we all have problems and we still pay our share.
The finances of the European Community are reaching the stage where they can no longer support our agriculture and its investment programmes. We are naturally anxious about the future and prosperity of agriculture. We accept that it is an important ingredient in the success of our

nation, but that is no reason to exempt agriculture from the general rules that apply to all our constituents in their places of employment or business.

Sir Peter Mills: I must declare my interest. Despite the honeyed words of my hon. Friend the Member for Southend, East (Mr. Taylor), I am worried about his proposals. Incidentally, I never regarded my hon. Friend as a man who was easily shocked.
The amendment would be the thin end of the wedge and I have no doubt that full agricultural rating would follow. That would be a costly burden to British agriculture, which already has burdens enough.
The question that I have to put to my hon. Friend and to the House is whether the consumer would pay for the proposal in the amendment. It would add millions of pounds to food costs and I cannot see the consumer being prepared to pay that extra money. The question is not whether the farmer can afford it, but whether the consumer can afford it.
Food is a sensitive issue and under this Government prices have been held steady compared with what happened under the Labour Government. Adding to the consumer's burden by greatly increasing the cost of food would be a serious matter. I am grateful to my right hon. Friend the Prime Minister for giving a firm pledge that there would be no rating of agricultural buildings.
Perhaps my hon. Friend the Member for Southend, East does not realise the role of the farmer in looking after the countryside. Some farmers have caused problems for the community by tearing down hedges and so on, but they are the exceptions. The vast majority of farmers guard the countryside.

Mr. Teddy Taylor: Hear, hear.

Sir Peter Mills: I am glad that my hon. Friend agrees with me. That work done by the farmers is costly and it is in the interests of ratepayers and taxpayers that it should be done. Mark my words: if chunks of British farmland were not used, their maintenance would be costly for the nation.
Agriculture plays an important role. I am anxious about the burdens that it bears because of what is happening in Europe. It would be much more serious if we added the enormous burden of the rating of agricultural buildings. British agriculture would not be happy with the amendment.

Mr. Deputy Speaker (Mr. Paul Dean): Mr. Ivor Stanbrook.

Mr. Waldegrave: rose—

Mr. Ivor Stanbrook: Mr. Deputy Speaker—

Mr. Deputy Speaker: Mr. Waldegrave.

Mr. Stanbrook: There is plenty of time.

Mr. Deputy Speaker: Order. I called the Minister—who was rising — as is the normal custom in these matters. Mr. Waldegrave.

Mr. Waldegrave: I also have to declare an interest, but, despite that, I have some sympathy with the argument of my hon. Friend the Member for Southend, East (Mr. Taylor) when looking at it solely from the point of view of the Department which has to deal with rating matters. However, there are many other matters to take into account.
I wish to make it absolutely clear and to reassure the farming community and others who may be concerned that we do not intend to re-rate agricultural land or buildings.
I also sympathise with my hon. Friend the Member for Southend, East because in arguing for the re-rating of agriculture he has to argue against the trend that we should like to be following. We have been relieving some industrial properties—empty factories and so on—of rates, and that is the way in which we should like to move. Few know better than my hon. Friend the workings of the market, but my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) was right when said that the amendment would have an effect on costs. We could not shift the burden of millions of pounds on to an industry without that having some effect. The wise market has, in the years since 1929, adjusted its cost structure. Changing it would have an effect on the industry and, ultimately, on employment or prices.
My hon. Friend the Member for Southend, East referred to the commitment given by our right hon. Friend the Prime Minister. Perhaps I should repeat it:
I should make it clear, because there have been reports to the contrary, that, as was said in the White Paper, we do not propose to reopen the question of rating agricultural land and buildings".—[Official Report, 23 February 1984; Vol. 54, c. 972.]
Not only the present Government take that view. It is instructive to examine the response of the previous Labour Government to the Layfield report. They said:
The Government accept that in terms of rating principles there are extremely good grounds for treating agriculture just like other industries. But there are strong practical arguments against the Committee's recommendation for the re-rating of agricultural land and buildings.
We accepted in Committee that that was written by the hon. Member for Blackburn (Mr. Straw).

Mr. Straw: I did not write that. I wrote the good bits.

Mr. Waldegrave: The Labour Government's response continued:
First, the total income of local authorities would probably be unchanged because the increase in rateable value would be balanced by a reduction in grant from the Government. Second, valuation of agricultural properties would involve extra costs for the Inland Revenue and for local authorities. Finally, there would be significant adverse effects on the financial position of the farming industry, and so on home food production and food prices. The Government therefore do not propose to accept the Committee's recommendation.
Against the very difficult position of change and stress that the agriculture industry is about to face, and as we come to grips with the common agricultural policy and its successors, this is not the right moment to argue for this change. It is not only in the short term that the Government remain committed to the derating of agricultural land and buildings. As my right hon. Friend the Prime Minister has made clear, we remain committed to it as a long-term policy.

Mr. Stanbrook: I am profoundly disappointed by the words of my hon. Friend the Minister in dealing with this important matter, and I warmly support the amendment, moved in his usual cogent fashion by my hon. Friend the Member for Southend, East (Mr. Taylor).

Mr. Straw: On a point of order, Mr. Deputy Speaker. I realise that you cannot control the speeches of hon. Members, but can you suggest to the hon. Member for Orpington (Mr. Stanbrook) that, as his hon. Friend has entirely agreed with him, and as there are more important

amendments to be taken in the next five minutes before the guillotine falls, perhaps he would like to bring his remarks to a close?

Mr. Deputy Speaker: That is a point of information rather than a point of order.

Mr. Stanbrook: The hon. Gentleman is misinformed. I do not agree with the Minister. I find that the Conservative party's general policy against restrictive practices and the existence of privileged groups is an attractive one. We have had the pursuit of restrictive practices among opticians and solicitors and it was suggested that farmers should be the next target. Lo and behold, unfortunately, my right hon. Friend the Prime Minister recently surrendered without a shot being fired.
This is a terrible shame. There should be a system of public financing that is as broadly based as possible, set at as low a level as possible, and with the minimum of exemptions and allowances. It is all very well for my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) to speak on behalf of those who would be affected by the amendment. There are many spokesmen for privileged groups, but he is speaking about a class of people who are sturdy, well off and would not be so troubled by the application of a general rule in the interests of justice. The Government now have a moral duty, having given up the cause of rate reform, to proceed along the lines suggested by my hon. Friend the Member for Southend, East. I warmly support his amendment.

Question put and negatived.

Schedule 1

MISCELLANEOUS AMENDMENTS AND REPEALS

Dr. John Cunningham: I beg to move, amendment No. 43, in page 22, line 46, at end insert—
'20. In the third Schedule to the General Rate Act 1967 (Classes of Machinery and Plant deemed to be part of hereditament) Class 4 therein shall cease to have effect'.'
This is an important amendment for industry, and I shall have to be brief in explaining why. The amendment seeks to change the rating system to remove the rating of fixed plant and machinery, the point being that, while industrial buildings are rated on the basis of including fixed plant and machinery, those that include mobile plant and machinery are rated in a different manner. The outcome of this is one of major significance for industrialists, for companies and firms throughout the major industrial areas, particularly in the midlands and the north, and for heavy industry on Tyneside, Wearside, Teesside, south Yorkshire and the midlands. These areas would benefit greatly if this amendment were to be accepted and the change were to be made.
I understand that the Sheffield chamber of commerce wrote to the Secretary of State about this matter in October 1983 and it illustrated its case by setting out some of the costs. For example, within an engineering company's department, including high volume, heavy but mobile plant, the rates as a percentage of turnover were 0·7 per cent., but in a different department of the same company, with fixed plant, the rates were 8·2 per cent. of turnover.
That is a brief illustration of the argument and the Government's attitude to this will be of great significance to industrial areas throughout the country. I commend the amendment to the House.

Mr. Waldegrave: I have listened with attention to the hon. Member for Copeland (Dr. Cunningham). As he said, the Sheffield chamber of commerce has been in correspondence with my right hon. Friend the Secretary of State on this matter, and anything we hear from such a source we take extremely seriously, not only on this subject but on matters such as—

It being fifteen minutes past Eight o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to order [29 February] and the resolution yesterday, to put forthwith the Question already proposed from the Chair.

Question put and negatived.

Mr. Patrick Jenkin: I beg to move, That the Bill be now read the Third time.
We have had a Report debate in which we have discussed detailed matters of mechanisms, safeguards and exemptions. It may be appropriate to remind the House that the Bill is about rates, about protecting ratepayers and about curbing high rates. Combined with the similar measures applicable to Scotland, the Bill carries out the pledge that we gave at the last election to the British people that:
We shall legislate to curb excessive and irresponsible rate increases by high-spending councils, and to provide a general scheme for limitation of rate increases for all local authorities to be used if necessary.
In addition, for industry we will require local authorities to consult local representatives of industry and commerce before setting their rates. We shall give more businesses the right to pay by instalments. And we shall stop the rating of empty industrial property.
This Bill fulfils all but the last pledge, and that is the subject of a statutory instrument that is now before the House.
I should like to stress the amount of care and thought that has gone into the debating of this Bill. The Committee stage lasted for 30 sittings —111½ hours of sustained debate. The guillotine was applied. only because, as we said on the guillotine motion, the Opposition were clearly indulging in time-wasting. The hon. Member for Tyne Bridge (Mr. Cowans)— whom I am glad to see in his place as he has been throughout most of the debate—in his most engaging manner kept us amused for no fewer than five and a half hours on the trot late one night. His loquacity as always entertained us, but that is not always the best way to debate a Bill.
However, it was remarkable how, once we had the guillotine, the Opposition introduced a dramatic change of tactics and at times seemed to have difficulty in finding enough material to fill the available time.
The Committee covered the Bill, which is a short but important one, in considerable detail and in our two full days of Report we have also been able to discuss at length many of the major issues in the Bill. The guillotine fell only on the final amendment relating to a technical point on plant and machinery.
The Bill is already having its impact on rate levels. The average general increase for rates in 1984–85 could turn out to be the lowest for 10 years—probably less than 6 per cent. That is what happens when minds are concentrated. I shall not weary the House again with the evidence from Newcastle upon Tyne to show how that council's mind was deliberately focused on the Bill in Committee, and on the fact that the council would have failed seven out of the 11 tests for capping that I illustratively put before the Committee.
The figure of 6 per cent., or perhaps less, is an average figure because it combines the authorities that are heeding the Government's expenditure plans with those that are not. Some rate increases are much higher than that. The latest indications from the London borough of Southwark are that its domestic rates will be up 15 per cent., with its local rate up a staggering 28 per cent. In the London borough of Lambeth, which the hon. Member for Blackburn (Mr. Straw) occasionally graces with his presence, as, indeed, I do, the borough rate is up no less than 34 per cent. In the London borough of Greenwich, in which the constituency of the hon. Member for Woolwich (Mr. Cartwright) lies, although it is not quite so swingeing, it is up 20 per cent., but, as we all know, the rates of that borough have gone up more than fourfold in the past four years. The hon. Member for Woolwich — and this is an excerpt from the Committee stage which we shall be taking trouble to circulate in his constituency—said then that, although he did not agree with Greenwich council's priorities—and this is one of the highest spending councils in London—he did not think that it was an overspending council. That says volumes for the attitude of the SDP to these matters.

Mr. Straw: Since the expenditure of Greenwich, on the right hon. Gentleman's tables, has gone up in comparison to the rate increases by only 113 per cent., compared with a 400 per cent. increase in rates, will the Secretary of State explain why the rates have gone up three times as fast as expenditure over the past four years?

Mr. Jenkin: Of course. It is because the Government have operated a system that has sought to apply greater accountability to ratepayers, and so persuade councils to curb their spending. If councils like Greenwich council have simply refused to do so, they have ended up by imposing appalling burdens on their ratepayers. That is what the Bill is about, because the selective powers of part I will enable the Government to identify the most irresponsible local authorities, and we shall start this summer. At present they account for a disproportionate amount of the overspending on plans. Sixteen authorities only account for three quarters of the budgeted overspend in the current year. This will help us to secure our economic strategy, of which the central element is to rein in the public sector, so that individual and business taxpayers are left with more money to spend, or invest, as they wish rather than as the Government or public authorities think fit. The scheme will also have a wider shadow effect on other authorities who are obviously adopting more economical policies to avoid being selected next year.
Finally—and this is a point of great importance, of which I know my hon. Friends Ihave taken note—our ability to restrain the highest spenders effectively in the 1985–86 year will help us to meet what I entirely recognise are the genuine worries of the low spending councils.
Many of my right hon. and hon. Friends have been concerned that we have had to ask for proportionately greater savings from the lower spending councils to bring the total of spending near to our plans, and they have made it clear that they, as do my friends in the councils for the areas that they represent, regard that as very unfair. What I find so difficult to understand about people who accept that argument, as I think the Association of County Councils recognises, is that they continue to oppose even


part I of the Bill. That seems an illogical stance. It is something which a number of its members are increasingly beginning to call into question. I know that my hon. Friend the Member for Norwich, South (Mr. Powley) will have seen the correspondence from the leader of the Norwich council, taking a markedly different view on the Bill from the view that the Association of County Councils as a whole has taken, and I believe that he has been joined by a number of neighbouring council leaders.
Most concern has been focused on the reserve powers of general rate limitation, on which we have had a good debate in Committee, and earlier today. I emphasise that the general scheme is a reserve scheme. We hope never to have to use the powers, but they need to be in place on the statute book in case the circumstances arise in which they have to he used. The purpose is to show that, if any council is tempted to follow the road to extravagance, we intend to see our economic policies through. Once the Bill is on the statute book, responsible councillors in the high spending authorities, those councillors who argue for economy, will be able to point to part II of the Bill to back up their arguments. I think that that will be helpful to them. If, in a year's time, or in two, three or four years' time, we find ourselves with 60, 80 or 100 authorities bent on pursuing wildly extravagant polices, the powers in part I would not be appropriate to deal with that, and in those circumstances we would need to take the steps to put a general ceiling on local authority spending and rates.
I emphasise that the rain will not fall on the just and unjust alike. The Bill already contains the power to exclude by order councils spending below a given level. Earlier today, I went further, and promised to commit myself to more specific exclusions in the Bill. I gave a firm undertaking to table an amendment in another place to meet the principles contained in what was amendment No. 39, in the name of my hon. Friend the Member for Honiton (Sir P. Emery) and a number of my hon. Friends. I was grateful for the general welcome given to that undertaking, and we shall of course fulfil it.
One other fear that has been expressed about part II —and this was mentioned by my right hon. and learned Friend the Member for Hexham (Mr. Rippon)—is that the procedural safeguards that we have built into the Bill are inadequate. The House will know that, before part II can be implemented, there has to be consultation with local authorities, and an order which has to be passed affirmatively in this House and in the other House.
My right hon. and learned Friend suggested that the orders might be debated late at night, and perhaps with only an hour and a half for discussion. The House knows that, following the consultation with local authorities, there is bound to be considerable debate on the matter. There will no doubt be a good deal of acrimony and discussion, and a lot of correspondence. When the matter comes before Parliament, I would regard it as inconceivable that such an important change could be approved without a major debate in each House. I have made it clear that we would not want it to be otherwise.

Mr. Cormack: The fact is that it could be approved after one and a half hours, and for all the letters that might flow, and for all the representations that might be made, this matter could be decided in one and half hours between 11.30 and 1 am.

Mr. Jenkin: My hon. Friend knows that that would apply to a great many orders of importance. I might cite

the rate support grant orders, which are hotly debated in the House every year, when precisely the same provisions apply. My hon. Friend will know that the pressure in the House, through the usual channels and through the Whips' Office, would make sure, as it does every year, that those orders are fully debated, as these would be.

Mr. Rippon: Would my right hon. Friend describe the rate support grant and other orders as major constitutional matters, which is what he said part II comprises?

Mr. Jenkin: In part II, we are debating a matter which, if it had to be implemented, would mean a substantial change in the relationship between central and local government. It is therefore right for it to be debated fully during the passage of the Bill, and I have no doubt that it will be debated fully in another place. Because it is an important matter, it is an unreal fear to imagine that somehow this will be slipped through at two or three o'clock in the morning as, for instance, the question of the House of Commons underground garage was slipped through. I have no doubt that my right hon. and learned Friend will remember that.

Mr. Rippon: That was not a major constitutional matter.

Mr. Jenkin: From the fuss that was made, some people might have thought that it was.
I have made my position clear. It is not my intention that such an important change should be approved without a major debate in both Houses.

Mr. David Howell: I think that the question of the constitutional nature of the change is important. I appreciate the way in which my right hon. Friend bas emphasised the major constitutional significance—to use his words—of any proposed change under the powers that he now seeks. It would be valuable to have his reassurance that he recognises not merely that the debate on part II has been a debate on a constitutional matter, but that orders made under part II will be orders of constitutional significance.

Mr. Jenkin: The orders under part II will implement part II and, therefore, will themselves have constitutional implications. I would not wish to suggest that it is, therefore, inappropriate for the matter to be dealt with by order. It is unusual with legislation affecting local authority rating to involve both Houses of Parliament. For example, the rate support grant orders are not debatable in another place, only in this House. Yet the orders made under the Bill will be debated in, and require the approval of, both Houses. That is an important safeguard. My hon. Friend the Member for Staffordshire, South (Mr. Cormack) wondered why that should be. I must spell it out.
If, after local elections or some other event, we are faced quite suddenly with a substantial number of overspending councils—my hon. Friend shakes his head in disbelief, but it could happen—we would need to act promptly. If that happens during a financial year we would be faced with the prospect of introducing fresh legislation that might not get through the House before the end of ithe Session. We might have to wait two or even three years before the rate capping would affect the councils and protect their ratepayers. Faced with the experience that we


have had with the minority, no responsible Government would leave such a gap. That is why we must have these provisions in the Bill.

Mr. Cormack: Opinions are one thing, but constitutional imbalance is something quite different. Would my right hon. Friend be happy if the tables were reversed, the Secretary of State was a Labour Member and the electorate, in revulsion at what was being done, decided to elect a great many Conservative authorities, and their will was immediately negated, expunged and revoked by Government edict?

Mr. Jenkin: My hon. Friend has put a wholly unreal proposition. [Laughter.] Oh yes he has. I am grateful to him for having raised the point. What lies at the heart of the Bill is the long-standing constitutional convention that local authorities broadly abide by the spending guidelines laid down by Parliament.

Mr. Straw: No.

Mr. Jenkin: The hon. Member for Blackburn has consistently denied that convention. Governments whom he supported relied on it and Governments who have made appeals for economy from councils throughout the country received a favourable response from a large number of them in areas that are now represented by my hon. Friends. Many Labour-controlled councils have recognised, and still recognise, that the House has an overall right to establish the totality of public spending.
Local authorities are under a constitutional obligation. A minority of councils have chosen to deny that and to make speeches about the local state and so on. In the end, the House has had to step in to say that, although we would rather have left the matter to convention, that convention is not being observed. The electorate cannot vote for a unilateral declaration of independence—it cannot vote to opt out of the constitutional convention.
Time does not allow more than a brief mention of the rate reform measures in part III. The measures to require consultation with business and improvement in rating arrangements for the disabled are not inconsiderable reforms. They will help respectively the accountability of local authorities and the position of a minority of people who deserve and receive our sympathy and support. They are useful measures that will have widespread consent.

Mr. David Harris: I hope that my right hon. Friend can reassure those of us whose main objection to the Bill is that it does not go far enough in dealing with the whole question of rate reform. Is the Bill the totality of the Government's proposals for rate reform during this Parliament?

Mr. Jenkin: I am a firm admirer of James Bond, and his latest film is called "Never Say Never Again". I would be the last to say that it would not be possible at some future date to find some effective reform of local government finance. The problems of high-spending, extravagant authorities that are holding their ratepayers to ransom must be dealt with now. I do not preclude the possibility that at some future date the search for a satisfactory alternative to rates, which has so far eluded us, will succeed. I hope that we can resume the search, but in the meantime we must get the Bill through Parliament.
I wish to clarify some of the misunderstandings about the provisions of schedule 2 that relate to moorings. There has been a great deal of disquiet about that provision, and it is right to put the matter on record. Occupiers of moorings have been liable to be assessed for rates since the middle of the 19th century. Many of the letters received by the Department have suggested that the provisions of schedule 2 represent some enormous advance in the rating system and extend rating to a whole class of hereditaments. That is not true. In practice, many owners of moorings have escaped liability because of the practical difficulty of making assessments.
We estimate that 35,000 moorings are currently rated and pay rates, and that 40,000 moorings that should pay rates do not do so. That arbitrary distinction is unsatisfactory and unfair. The schedule simplifies the assessment of moorings by enabling the owners of groups of moorings to be rated.
The schedule also deals with swinging moorings—a single block of concrete or anchor on the bed of a river or the sea to which a buoy is secured. There is a doubt about the rateability of some moorings. If they are not permanently fixed to the sea bed, they may not be rateable. As my hon. Friend the Under-Secretary said in Committee, in response to an amendment tabled by my hon. Friend the Member for Southampton, Itchen (Mr. Chope), the Government have concluded that it would be sensible to clarify the law and that it would be desirable to ensure that all swinging moorings are treated in like manner. We are considering what changes are needed to ensure that such moorings are not liable to be assessed for rates.

Mr. Harry Cowans: Hear, hear.

Mr. Jenkin: If the issue were judged by the number of letters that my Department has received, those cheers would be well merited. What has been the law in Scotland will now be the law in England also.
The Rates Bill is designed to curb high spending and high rates and to protect ratepayers. It includes an important element to prevent a new and disastrous surge in spending. It contains strong safeguards to ensure that control of public spending is balanced against the need for healthy local authority decision-making on local issues. It is an important part of the Government's implementation of their pledges at the last election, and as such I commend it to the House.

Dr. Cunningham: I regard this as a sad and dangerous occasion for the House of Commons. I say that, not simply as a Socialist, but as a northerner to whom increased London domination of life and activities of the part of the country that I represent is anathema. I believe that that view is shared by millions of people, regardless of political persuasion.
The issues on Third Reading remain the same as they were in our debate on 17 January this year. The Bill is a naked attack on local democracy and local freedom and rights. It embodies a fundamental change in the constitution—a major shift in the balance of power from local level to Whitehall. It is remarkable how sensitive the Secretary of State is to that charge. It is also remarkable that the speech that he has just made will probably be


remembered for the fact that he devoted more time in it to the rating of yacht moorings than to the constitutional change that is embodied in the Bill.
The Secretary of State talked about a consensus being broken by local government. If anyone has broken a consensus in the relationship between central and local government it is this Administration, who carried out an increasing assault on local government and local democracy throughout the last Parliament, and that assault has been heighteneand broadened in this Parliament. The fact that no consensus remains is the responsibility of the Prime Minister and her Ministers, who have been responsible for this attack on local freedom and local services and jobs.
It is also strange, and indicative of the present mood and thinking of Ministers, that increasingly they fear to trust electors to make the decisions that have been made in our cities, towns and shires for decades—not only in this case, but apparently also in the case of the future of the Greater London council and the metropolitan counties of England, where we believe that people are to have their right to vote taken away from them in an imminent Bill that the Government intend to introduce.
The Bill embodies a major change in local government finance. It envisages the central use of the theoretical calculation—grant-related expenditure assessments—as a bench mark against which local government's performance will be judged, and against which the needs of many of the most underprivileged and disadvantaged people in our communities will also be judged. The proposal, like the Bill as a whole, not only wrecks but renounces a series of promises made by Conservative Ministers, the predecessors of the right hon. Gentleman—the right hon. Member for Henley (Mr. Heseltine) and the present Secretary of State for Trade and Industry—who repeatedly promised this House and local government that grant-related expenditure was never intended to be used in that way and would never be used in that way. It is clear, in addition, that even now, in spite of all that the Government have attempted to do with local authority associations, those associations remain implacably opposed to the use of grant-related expenditure as envisaged in the Bill. It is a wholly unsuitable measure or test for use in the way that the Bill envisages.
The Bill as a whole reneges on the promise made by the Prime Minister to abolish domestic rates altogether—a promise that millions of people remember all too well. It was astonishing to hear the hon. Member for St. Ives (Mr. Harris) say that the Bill did not go far enough in reforming the rating system. The Bill makes no attempt to reform the rating system. It is not a rates Bill. It is not about reforming rates. It will do nothing in that direction. It is an expenditure Bill. It is a measure to control expenditure, with massive and far-reaching implications for education, social services, housing and the whole range of services that is historically provided by the community for the community's benefit. That is what the Bill is about. At a time when the overwhelming majority of local education authorities are judged by this Government's inspectors not to be coming up to minimum standards, it is astonishing that this Bill will be used to make a further attack on education provision in our schools.
Our Committee proceedings show quite clearly, and the Secretary of State admitted it during our discussions, that his intention is to control the expenditure and budgets of local authorities. Moreover, the Bill cannot produce

fairness between ratepayers. It cannot result in significant reductions in public expenditure, unless part II is widely implemented. The Secretary of State said again this evening that that is not his intention. His predecessors said that it was never their intention that the penalties introduced to attack local government by this Administration would be widely used, but those penalties are now implemented almost across the board, in shires, boroughs and cities.
The Secretary of State was rather foolish to mention election pledges, because the Bill does not carry out an election pledge. It is a smokescreen for the fact that the Government are ratting on a twice-given election pledge to get rid of domestic rates. The Bill's intention is to give Ministers power to dictate to councils what they can spend in tackling the problems that people have elected those councillors to solve in the communities that they represent.
The Government often talk—the Secretary of State did it again this evening—about rates, but the Secretary of State almost never talks about the services on which so many millions of people depend. He never talks about the damage that is being done to those services in our communities. In particular, he never talks about the damage that is being done to the disadvantaged and to those who are at risk—the elderly, the infirm, the sick, young children, the black and ethnic communities. I understand that his Department has confirmed that, in addition to this measure, the future of partnership and programme provision is under review. Again, the Treasury is enforcing its judgment on his Department. It would be a catastrophe if those programmes were wound up. To lose partnership and programme, or support for black and ethnic communities in inner cities, will increase social tension, disadvantage and disillusion. It will also increase bitterness and anger.
The right hon. Gentleman is fond of picking on certain authorities. He mentioned Greenwich again this evening, as he has done many times before. I was in Greenwich this morning, seeing some of the services provided by that borough and some of the problems that the council is trying to deal with. If he believes that Greenwich—which is, I think, the fourth lowest rated inner London Borough—is profligate, he should look at some of the other inner and outer London boroughs. He should look at what the Audit Commission said about Greenwich council. If he thinks that Greenwich is extravagant, he had better look at the cost of administration there compared with that in other London boroughs. If he does all those things and comes back to the House saying that Greenwich is extravagant, he will not only be deluding himself but he will be deceiving the House.
One can say the same about Hackney, Liverpool and south Tyneside. Those are all communities under considerable stress, not as a result of councils wanting to put up rates willy-nilly but because of the persistent reduction of the rate support grant by the right hon. Gentleman and his Government colleagues.

Mr. Malcolm Thornton: That is rubbish, and the hon. Gentleman knows it.

Dr. Cunningham: The facts speak for themselves. There has been a consistent and real reduction in the RSG in every year that the Goverment have been in office.

Mr. Patrick Jenkin: The hon. Gentleman knows perfectly well that the Government of which he was a


member progressively reduced the percentage of the RSG from 1976 through to 1979. Why is it right for them and wrong for us?

Dr. Cunningham: There is no comparison, and the right hon. Gentleman knows it, between the RSG when the previous Labour Government left office—62 per cent.—and the outturn in the coming financial year which is likely to be less than 50 per cent. in practical terms.

Mr.0 Beaumont-Dark: As the hon. Gentleman knows, I am against the Bill as much as he is, but does he agree that, although Liverpool council house rents may be some of the highest in the country, although its Conservative leader thinks that the budget set for Liverpool is draconian, although it is conceded that Liverpool has problems, if Liverpool goes on a lawless course, all good men who believe in the parliamentary running of Britain should condemn that course?

Dr. Cunningham: I shall not be drawn into a debate on what is happening in Liverpool except to say that if the hon. Gentleman is unaware of my views about what is taking place in Liverpool that is his fault and not mine. I have gone out of my way to make it clear to the leaders of Liverpool city council, to the media and to anyone else who has asked me what my views are that Liverpool city council should adopt a legal budget and a legal rate. I have said that many times. In case anyone is in any doubt, I should say that the position which obtains in Liverpool at the moment is not the fault of the Labour group which took office only 10 months ago, but is due to 10 years of Conservative and Liberal control. However, that is a side issue—

Mr. Michael Meadowcroft: rose—

Dr. Cunningham: I shall give way in a moment.

Mr. Meadowcroft: The hon. Gentleman is frightened.

Dr. Cunningham: Frightened of the hon. Gentleman? He must be joking. The hon. Gentleman deludes himself. He has delusions of grandeur. I shall give way in a moment if the hon. Gentleman will contain himself.
It is a fact that the Labour party came to office in Liverpool city council 10 months ago. Anyone who argues that it is responsible for the situation in Liverpool is guilty of fabrication.

Mr. Meadowcroft: I am concerned not whether the hon. Gentleman is frightened of me but whether he is frightened of the arguments. The fact is that the culprit in the city of Liverpool is not my party, his party or the Conservative party, but the Government, who have taken away money year by year. The Labour party has been the largest in the city of Liverpool for five years but would not accept the reins of office; only the Liberals would do that.

Dr. Cunningham: I agree that the Government have been responsible for systematically removing resources not only from Liverpool but from every council in Britain.
I said earlier that local government associations remain implacably opposed to the Bill because they recognise that it is about transferring resources away from those areas which need and deserve them most to either the Exchequer or areas which need them less.
In forcing through the Bill with no amendment of any significance, the Government are only calling the bluff of

many Conservative Members. With some honourable exceptions — some of those right hon. and hon. Gentlemen are present in the Chamber and I give them credit for it—there has been no significant revolt on the Tory Benches in answer to this measure. There has been no attempt by Conservative Members, many of whom have local government experience, to do anything to protect the rights of local government. The Bill is a humiliation of the many horable Conservative councillors who seek to provide effective services in Britain's shires, towns and cities.
It is almost as though the Government believe that they are the only ones in step and that everyone else is out of line. The Government are almost friendless in their determination to push the Bill through Parliament. The Secretary of State alluded to amendment No. 39 as though it were some important concession. In reality, it is a mirage. It is not worth the paper that it is written on. It seems to be an attempt to persuade Members of the House of Commons or the other place that some major change is being written into the Bill to remove the uncertainty and doubt about the use of general powers. That is simply not the case. Like many other local government Acts that the Government have introduced, this will not work as claimed and only the Government believe that it will.
I regret that the Bill has to proceed from this Chamber. I truly and deeply wish that the House would reject it, even at this late stage. Labour Members will certainly oppose it. I make it clear once again, without equivocation, that a future Labour Government will abolish the Bill and return to local government the rights which the Bill seeks to remove.

9 pm

Mr. Piers Merchant: I cannot pretend that it is with relish that I rise to support the Bill, but support it I do, for it has become not only necessary but essential. I am sensitive to the arguments of hon. Members on both sides about its less welcome characteristics, and I hope that the passage of time will render it an anachronism by taking us away from the economic and political circumstances that have made the Bill inevitable and essential.
I do not easily support extra legislation or increased Government intervention—many of my hon. Friends will sympathise with this—at a time when we suffer from over-government, too much legislation and the perennial threat of centralisation. However, over-government need not just be the fault of central Government. Local government can be equally to blame. Indeed, from the individual's point of view, excessive taxation, the unnecessary extension of bureaucratic power and the general growth of state intervention is equally resented, whatever its origins.
It is, therefore, fallacious to argue that local democracy is better because it is local. That nicety will have no appeal to the individual who seeks protection from local abuse. He would rather see a minor extension of central power to curb excessive extensions of local power than tolerate the latter to satisfy the theoretical arguments of so-called constitutional propriety.

Mr. Beaumont-Dark: Sometimes one cannot believe one's ears. Is my hon. Friend saying that, having sat through the debates on the Bill in Committee for 100 hours


or more, he can still call this a minor taking away of liberty? I tremble to think what he would regard as a major one.

Mr. Merchant: Having listened carefully to the debates in Committee, I believe that the number of authorities that will feel any impact from this legislation will be distinctly minimal. Those which do will find any impact only on the upper level of rates, and therefore it will not grossly interfere in the decisions that they make at a local level.
Indeed, I believe that the Bill will reduce state interference and that it is libertarian rather than totalitarian because its effect will be to reduce, rather than extend, state influence as a whole. There is a clear tradition that supports intervention by Parliament to curb excesses by other forms of lesser authority in the nation, and an equally strong duty on Parliament, in such circumstances, to act as the protector of the individual.
The continual abuse of ratepayers has created the necessity for reform, and those who complain about the Bill should have no doubt about where the blame lies. It lies not with the Secretary of State, not with the Department of the Environment and not with Parliament. The blame lies fairly and squarely with those irresponsible and inefficient local authorities who have created the conflict by their intemperate and ungoverned attitudes. They have had every chance to reach a consensus with Government, but have clearly rejected compromise. They have also been deaf to local pleas and have exercised a ruthless tyranny of the majority over the minority, or even, in some cases, of the minority over the majority.
However, I wish to be more specific in my argument and to demonstrate why some local authorities have betrayed the original spirit of their existence and are ripe candidates for reform. I particularly ask for the indulgence of my hon. Friends who are lucky enough to come from areas where there is little evidence of abuse and who, therefore, may lack direct experience of how severe the abuses have become—too severe for local remedy.
In some authorities the abuses are products of a new or enhanced Socialist ideology, as my hon. Friend the Member for Norwich, South (Mr. Powley) ably illustrated yesterday. In my authority, Newcastle city council, it is not so much what it has done as what it has failed to do—failed in terms of management and administrative control—so that the indictment is not so much political waywardness as political ineptitude. The bureaucratic monster is out of control. It is feeding on itself, defending its own existence and that of its empire while sucking money from the poor ratepayers.
Over the years, as each department in Newcastle has swelled, so it has spawned new departments with new functions and new bureaucracies, finding new ways of spending money. Even casual scrutiny of the city council's 275-page budget book reveals a story of extravagance, luxury and waste. In a half-hour examination, I found scope to make further cuts of at least £1,750,000 without any effect on essential services. Yet, while the city's Labour leaders fall over themselves to preserve those areas of political vested interest, they impose painful cuts on essential services, which their bloated propaganda machine blames on my right hon. Friend the Secretary of State.

Mr. Nicholas Brown: I listened to the hon. Gentleman with interest and, I admit,

a little amusement. If the hon. Gentleman has a list of suggestions for making savings—not budgetary cuts—in the municipal budget of Newcastle upon Tyne, will he accept the invitation issued by my friend and colleague, councillor Les Russell, the chairman of the city council's efficiency committee? Will he forward his detailed suggestions for efficiency savings to councillor Russell and that bi-party committee so that they can be examined in detail? Levels of expenditure, rather than efficiency, divide the parties in Newcastle.

Mr. Merchant: I should be delighted to accept the hon. Gentleman's suggestion. I shall do as he asks. If he cares to listen for a few moments, I shall cover some of the subjects into which I shall go in greater detail in my letter to councillor Russell.
The city council talks about merging schools, axing the number of teachers and doing away with meals on wheels. However, it sustains a whole department devoted to propaganda, costing up to £200,000 a year; the Walker and West End resource centres, providing subsidised duplicating and printing services to outside organisations and costing the ratepayers about £110,000; a summer exhibition, which, incredibly, the council has managed to run at a loss for years, costing about £50,000 a year; and a host of odd groups thriving on cash handouts.

Mr. Edward Leigh: As I represent Lincolnshire, I am used to local authorites acting with the utmost rectitude. I was surprised, therefore, to read in a national newspaper about the centre to which my hon. Friend referred. Will my hon. Friend confirm that a councillor outside the area is being investigated for using that centre free of charge to print election propaganda?

Mr. Merchant: I understand that that is the case. It illustrates exactly what happens when slack management and misuse of resources offer such temptations. Meanwhile, civic self-aggrandisement—

Mr. Nicholas Brown: On a point of order, Mr. Deputy Speaker. What the hon. Member for Gainsborough and Horncastle (Mr. Leigh) said in his intervention is utterly untrue. He should not invoke parliamentary privilege to make such a statement on a matter currently being investigated by the police.

Mr. Deputy Speaker: Order. That is a matter for argument. It is not a point of order with which I should deal. The winding-up speeches are expected to begin at 9.40 pm. Time is very limited, and many other right hon. and hon. Members hope to speak.

Mr. Cormack: On a point of order, Mr. Deputy Speaker. Will you confirm that it is the custom of the House for hon. Members to make short general speeches on Third Reading?

Mr. Merchant: I shall soon be drawing my remarks to a conclusion, Mr. Deputy Speaker.
Civic self-aggrandisement in Newcastle defends this year's expenditure of £283,000 on items such as the Lord Mayor, councillors' expenses and refreshments and so-called parliamentary promotions, about which I am sure the hon. Member for Newcastle upon Tyne, East (Mr. Brown) knows. I cannot believe that it is impossible for the Lord Mayor's office to run effectively on a much lower budget, or that it is unreasonable to have similar cuts in


the costs of committees, conferences and promotions. The resource centres are an unnecessary luxury at a time of restraint.
The propaganda department is the worst example of abuse. Recently, that department poured out 200,000 copies of one-sided news sheets, which were nothing less than blatant Labour party propaganda, funded by the ratepayers. The party political campaign on the rates is replete with posters, meetings and leaflets, and has cost thousands of pounds. It has rightly incensed ratepayers, and is a massive indictment of extravagance and a blatant piece of political abuse. I cannot believe that the deprived, about whom the council purports to care so much and to whom the hon. Member for Copeland (Dr. Cunningham) referred, would as much as notice if the entire information department were closed tomorrow or if some of the extravagant grants given to fringe art groups, for example, were cut.

Mr. Cowans: On a point of order, Mr. Deputy Speaker. Are we debating Newcastle city council or the Third Reading of the Rates Bill?

Mr. Deputy Speaker: The remarks of the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) are relevant, but I hope that he will be brief.

Mr. Merchant: I have referred to some examples to illustrate why it is necessary for the Government to intervene with a Bill of this nature. It was recently highlighted that Newcastle's education department employed five childminders at Pendower Hall school to look after children over weekends for two and a half years after children had ceased to be kept at that school over weekends. It was revealed that £720,000 had been paid to teachers for Sunday increments in so-called deprived areas and that the result, according to a former director of education, could not be described as beneficial in any respect. These examples illustrate the point that I am making.
Time does not permit me to refer to the many other examples that I could put before the House. However, I shall be prepared to send the details to Labour Members. They may say, "Yes, we accept that the Newcastle city council and many other councils like it are inefficient, but that is up to them" but, unfortunately, the issue is not as simple as that. In the current year the city's rates levy is 216·3p in the pound, not counting the county precept. Its levy is higher than that of any other authority in England. The rates rise for 1984–85 is double the rate of inflation. Against that background, I hope that the House will appreciate that local action can no longer be relied upon to right the balance.
I can assure the House that in Newcastle, especially among my constituents, there is an overwhelming demand for action to protect the ratepayer. There is a clear and undeniable call for the minimum necessary degree of reform to ensure that some measure of financial responsibility is enforced at local level. At such a time the people look to national government and demand action. That is why I and Conservative councillors in both the local authorities within my constituency support the Bill.

Mr. Peter Pike: When the Secretary of State moved the Bill's Third Reading, he talked about promises

that were made in the Conservative party's election manifesto of 1983. First, he referred to the need to curb irresponsible overspenders. That is nonsensical, because who determines who are irresponsible spenders? It is not for the Government to determine that issue. It is for local electors to determine whether councils are doing their job properly. Account must be taken of the circumstances in local areas. If candidates submit programmes on which they hope to be elected and are successful in obtaining a majority that allows them to put their policies into effect, that is fair and reasonable.

Dr. Keith Hampson: Is the hon. Gentleman saying that in some way the United Kingdom is a federal state and not a unitary state? When local councils have wanted to pursue different education policies from those which have been adopted by Labour Governments, Labour Members have argued differently. Local mandates do not supersede the mandate of this place.

Mr. Pike: I am saying that local councils have the right to determine their own responsibility. During the 1979 general election the Tory party declared that it was its intention to give more freedom to local government. We who have served in local government have seen little evidence that more freedom has resulted from the five years of Tory rule at Westminster.

Mr. Robert B. Jones: rose—

Mr. Pike: I shall not give way.
There cannot be freedom if the financial resources with which to provide services are tied down. It has been said several times that the Government have seriously handicapped local authorities by the savage cuts made in RSG each year since they took office. At the same time, the Government have added to the cost of local government by throwing at authorities additional items and responsibilities, such as the need to produce annual reports and to undertake more consultation. I am not saying that that is necessarily wrong, but it has resulted in additional local authority expenditure.
It was mentioned on Report that many people in local government of both major parties give many hours of devoted service to their local communities in trying to meet their needs. The ultimate measure of whether a council is doing its job properly must be in terms of the community needs of local electors.
The grant-related expenditure assessment figure for Burnley is £5·6 million, but our cash target is £8·2 million. Burnley is spending slightly more than the cash target. The community's need for housing, clearing industrial dereliction and attracting industry to the town means that the council needs to spend more rather than less money to tackle those problems. It is interesting to note that the Burnley chamber of commerce and industry believes that the council should be left to determine the rating policy: town hall, not Whitehall. The responsibility should be left in the hands of the local authority.
As a Burnley ratepayer, I believe that we need to spend more money to tackle the tremendous amount that needs to be done. I also pay rates to Lancashire county council, which is in the reverse position to Burnley borough council because its cash target is well below its GREA figure. If Lancashire county council spent up to its GREA figure, it


would be heavily penalised by the Government. That would he nonsense in a county suffering from industrial dereliction.
The Secretary of State referred to the requirements in part III for consultation with industry. Why should industry be singled out for formal consultation? If the Secretary of State is inferring that councils are so irresponsible, whether Labour, Conservative or Liberal, that they do not take into account the ability of all sectors of the community to meet the rate, that is nonsense. I served on a Conservative-controlled local authority in London some years ago and was leader of the Burnley borough council until May last year.
Most councils spend a considerable time working out not only what the domestic ratepayer can pay but the effects on industry and commerce. [HON. MEMBERS: "Do they?] In Burnley the council visits industry asking what its problems are and what it feels about what local government is doing. Therefore, one must accept that many councils act responsibly.
The Secretary of State also said that one should be able to pay rates by instalments. That can be done now. Burnley gives every ratepayer the right to pay his rates by 10 instalments. We have had that system for many years, and I introduced it while I was leader of the council. If any ratepayer—domestic, commercial or industrial—said that he was in difficulties and wanted to pay by weekly instalments, the borough treasurer and the council would be happy to come to a sensible arrangement to meet his requirements.
Burnley does not rate empty property because it would be irrelevant to do so at a time like this. However, when property is held for speculative purposes, the situation is different. Local councils should have the right to determine policy in accord with the circumstances.
The Secretary of State referred to rate increases in the current year imposed by several councils, one of which was Blackburn. I do not wish to tread on the toes of my hon. Friend the Member for Blackburn (Mr. Straw). I am well aware of the situation in Blackburn, where there has been a large increase in the domestic rate this year. However, that has arisen not from the change of control but from the simple fact that the previous administration used £1 million from balances in the past year and there had to be a large increase to maintain the status quo.

Mr. Straw: Notwithstanding that increase, Blackburn borough council is still 1 per cent. within the Government's imposed target, and will not suffer a penalty.

Mr. Pike: I accept that. Even with that increase, Blackburn is not the highest rated authority in Lancashire; Burnley is.
I recognise that there is not much time left, and I want to let other hon. Members speak. However, I must make these points. How does one assess an overspender? Burnley has the highest rate in Lancashire. We do not complain about that. The council has a tremendous job to do. Each year it has to work out what is desirable and necessary. Each year what we are able to do is reduced as we have to cut to the bone.
Burnley is the third highest spender per head of population of the non-metropolitan districts. However, only two district councils in the whole of England have had a lower rate per head of population than Burnley in the current year.
The Bill is bad. It removes powers from local government and will tie its hands behind its back. People will see little point in being elected to local councils if the powers that enable them to deal with local problems are taken away. I think that most local councillors will believe that, whether Labour, Conservative, Liberal or Social Democratic.

Mr. Rippon: I listened carefully to all that my right hon. Friend the Secretary of State said. He spoke yesterday and today with sweet reasonableness, but I do not believe in my heart that he will find it all that easy to distinguish between the just and the unjust.
When the time comes to make the decision, for example that Essex is out and Sussex is in, my right hon. Friend will find that the can of worms is still there. It is arguable that one authority or another, for example Newcastle, might so abuse its powers and be so extravagant that the Government should take action against it. However, on Third Reading of such a major Bill, one cannot deal with the individual authorities and the case for or against them.
This afternoon I quoted Professor Hayek's book "Road to Serfdom", much beloved by Conservatives. He said:
The coercive power of the State should be used only it cases defined in advance by the law and in such a way that it can be foreseen how it will be used.
The Secretary of State said that the justification for part II is that he is legislating for the unforeseen and the unforeseeable. One thing that is unforeseeable is who will be the Secretary of State when the so-called 100 bad boys have to be dealt with. I am not satisfied with the assurance that the present Secretary of State would have every intention of ensuring that there was a major debate. There are no adequate procedural safeguards. Consultation followed by an affirmative order which is not amendable does not, to my mind, constitute an adequate safeguard in the case of the introduction of legislation which, according to the Secretary of State himself, is a major constitutional matter. When I originally proposed that the Committee stage should be taken on the Floor of the House, the Government said that this was not a major constitutional matter, but the truth is that it is, and should be dealt with as such.
Even if the Government can distinguish between the so-called just and the so-called unjust, they will not have met the needs of the situation. The Bill is popular because many people believe that it will reduce their rates. It may reduce rates in the 19 or 20 authorities, but in the rest of the authorities it will probably put them up.
The Bill does not constitute a major reform. I have in my hand a copy of
The Conservative Party's New Policy Proposals On Housing And Rates",
published on 28 August 1974 by the then shadow Secretary of State for the Environment and her policy groups. We know that we cannot abolish domestic rates altogether, but the following suggestion was made at the time:
Further heavy increases in rates are forecast. In these circumstances Conservatives will take the following steps. First, in the medium term, we shall transfer to central government the cost of teachers' salaries up to a specified number of teachers for each local education authority. Expenditure on police and fire services will qualify for increased grants from the Exchequer. We shall see that this saving is passed on to the ratepayer.
The sum involved there would be about £4 billion, and the process which has been the real ground for complaint would have been reversed. The complaint is that we have


continually shifted the burden from taxes to rates—which are the tax least able to bear it—and from voters to non-voters. That is the problem that we have to deal with and we could deal with it if we wanted to.
It is difficult to summarise briefly all the constitutional objections to the Bill, but I recall the horror with which Conservatives greeted the famous or infamous declaration of Professor Harold Laski that the Bills of a Labour Government:
Would take the form of general formular conferring wide powers on the appropriate Government department.
What does this Bill do? It is a pure Socialist measure, and I take a high Right-wing Tory attitude to it.
I commend to my right hon. and hon. Friends Junius's famous declaration to the English nation. He said:
Let me exhort and conjure you never to suffer an invasion of your political constitution, however minute the instance may appear, to pass by without a determined, persevering resistance. One precedent creates another. They soon accumulate and constitute law. What yesterday was fact, to-day is doctrine. Examples are supposed to justify the most dangerous measures"—
I commend that point to my hon. Friend and right hon. Friends—
and where they do not suit exactly, the defect is supplied by analogy.
If the principles do not suit the Secretary of State in the future, he may change the principles.
Be assured that the laws, which protect us and all our civil rights, grow out of the constitution, and that they must fall or flourish with it. This is not the cause of faction or of party, or of any individual, but the common interest of every man in Britain.
On that, I rest my case. On that, I say that the Bill should not pass.

Mr. Michael Meadowcroft: The Government have produced a number of arguments in favour of the Bill, and I am sorry that the Secretary of State still relies on the view that his party has a mandate for it. There may well have been reference to such a measure in the manifesto, but the manifesto was not supported by a majority of the electorate, and those who voted against the Tory party oppose the Bill root and branch. We should not forget that.
The Government claim that the Bill was made necessary by the impact of rates on industry. The impact of Government legislation on industry is far greater than that of local government legislation. I do not necessarily oppose what the Government impose on industry but that should be borne in mind. Nor would I necessarily oppose what local government imposes on industry.
The Government has also said that industry or ratepayers do not have a vote and therefore must be protected from the ravages of local government. Every shareholder, customer and employee of an industry has a vote in a local authority area. It is interesting that, in Committee, it was the Confederation of British Industry which put out a press statement saying that it believed it important that industry should tell its employees what the cost of rates was per employee in that industry. If industry had taken that attitude more often to develop the argument about whether rates are an imposition on that industry, I suspect that we might have heard less about industry not having a voice in a local authority area.
The Government also adduced the argument that local government spending is out of control. The facts with which we have been presented often show that the Government's expenditure has risen faster recently than has that of local government on current and capital account. It would be unfair for the Secretary of State to hide behind high rate rises. If he used local government expenditure as the basis of his case, he would have somehow to tell us the mathematics of the reduction in Government grant.
We have also been told that an important point of the Bill is to curb the wild excesses of Labour-controlled councils. Virtually every local authority that has been cited as wild has recently been controlled by the Conservatives. Even Hackney, Islington and Sheffield have been controlled by the Conservatives.

Dr. Hampson: Fifteen years ago.

Mr. Meadowcroft: The hon. Member for Leeds, North-West (Dr. Hampson) might want to talk about just one year. It also happens to be the case that the boundaries of Sheffield then were far more difficult for Conservative Members to win because it was the old city council—without the hinterland. Saying that the Bill must be introduced to curb such authorities is a vote of absolutely no confidence in the ability of local Conservative politicians to win elections in their areas. I strongly commend hon. Members such as the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) who has had the courage to say that, if he cannot win his case on the strength of his beliefs in Birmingham, he would not wish them to be imposed on the electorate by a Government, even if they were a Conservative Government.
The Bill's constitutionality has been highlighted. This is a unitary state and therefore Parliament is sovereign. Not having a written constitution means that one has to rely on historic precedents for constitutional precedents. There has been a relationship between Government and local government for many centuries on the basis that, as long as local authorities are prepared to stand the consequences of raising their own finance—especially through a system that wins them no friends in the electorate—they are entitled to do so.
On all of the five counts that I have outlined, I believe that the Bill does not command the support of people who believe in the integrity and reliability of local government and therefore it does not deserve a Third Reading.

Mr. Eldon Griffiths: I speak as one of that strange tribe of former local government Ministers who has wrestled with the rates and deeply regrets that, when in office, he was unable, as was my right hon. and learned Friend the Member for Hexham (Mr. Rippon), to get them reformed. I approach the Bill disliking it in principle but believing that in practice it is necessary and should be supported. I find it difficult in principle because I am an unrepentant believer in the virtues of English local government. I find it difficult in principle because I believe that Whitehall does not know best and will not act best. I also dislike it because, as a Conservative, I want the maximum dispersal of power in Britain. Local government is one of the bulwarks against Leviathan.
I have looked at the realities and I think that sometimes, in their concern for the constitutionality of this matter, some of my right hon. and hon. Friends have lost sight of the practical problems that the Government have confronted. It is a fact that public expenditure was getting out of control and the £35 billion that local government deals with needed to be handled more effectively. I believe that on that ground alone action by the Government is necessary.

Dr. Hampson: rose—

Mr. Griffiths: No, I cannot give way.
Secondly, as a matter of practice there was and still is oppression of the ratepayer—oppression of the business ratepayer, which is destroying jobs; oppression of the private ratepayer, which is unjust. And the Government were required to go to the rescue of the oppressed ratepayers.
Thirdly, there has been a breakdown of that contract, that convention, between local government and national Government whereby it was always understood—certainly at the time my right hon. and learned Friend the Member for Hexham and I were at the Department of the Environment—that local government would remain within the parameters of expenditure set by central Government. I believe that that convention has been broken down not by the vast majority of authorities but by a few which, by their profligacy, were putting at risk not only their own ratepayers and industries but the central economic strategy of the Government which I support. This cannot be. The Government must take action against local authorities or any other groups in this country, be they trade unions or industries, which compromise the central economic strategy in the countering of inflation and the containment of public expenditure by the Government. Therefore, in practical terms, it was necessary to act.
I therefore have no difficulty with part I. Selective rate capping is obviously necessary and, I think, has general support. The problem has simply been over part II, and I am bound to say that I recognise some of the objections to this. But I will not accept the constitutional humbug that we have had from the Opposition on this matter for, in the 20 years that I have been in the House, again and again it has been the Labour party which has used the oppressive powers of its majorities against local government and against individuals. It is sheer humbug for it to talk about a constitutional approach.
On the other hand, the concern of my right hon. and learned Friend the Member for Hexham over this matter must give all of us grounds for anxiety. I have listened very carefully to all that he has said—and he knows that I was one of his most loyal right arms at the Department of the Environment—but, with respect, I think that my right hon. and learned Friend has ignored or not given sufficient weight to two factors.
First, for better or for worse, no constitution stands still. The British constitution's unique character is that it evolves. It is still evolving. In a society in which the motorways and communications revolution has changed the relationship between the centre and the parts, it is no use pretending that that balance between local government and national Government that existed in the 19th century, or even in the early 20th century, can continue. It has to alter. It is altering now.
Secondly, my right hon. and learned Friend gave insufficient weight to the emergence of groups of people

in a few of our big local authorities who do not give a fig for the constitution—in fact, they declare themselves determined to destroy it. There has emerged as well a minority of people who call themselves militants or extremists and who use the ratepayers' money not to serve the ratepayer but for political purposes, to destroy the central Government elected by the British people. That, too, is a fact of life which has to be recognised in practice in the House.
I have to say frankly that I do not like part II. I agree with my right hon. Friend the Secretary of State in hoping that it will never be necessary to use it. I believe that in practice it will not need to be implemented, because it provides a very stern deterrent. The deterrent effect of part II will do more than anything else to ensure that the containment of local authority expenditure which we all seek is achieved.
I could not have supported the Bill if my right hon. Friend the Secretary of State had not said earlier that he will bring forward an amendment in another place to ensure that local authorities that had been prudent and stayed within their GREA or their target would not be penalised as a result of an oppressive use of the part II powers. I am delighted that my right hon. Friend was able to offer that assurance to the House.
I am sure that we shall all look carefully at the amendment that is produced in another place. If, as I believe is likely, the Bill has a rough passage there, we shall have to look at it again. It is because my right hon. Friend gave that undertaking that I find it possible to accept a Bill which I dislike in principle, but which I think is necessary in practice.

Mr. Straw: All that I can say to the hon. Member for Bury St. Edmunds (Mr. Griffiths) is that, if he can be bought off with such conditional trivia as were offered by the Secretary of State, I am not surprised that his reputation lies where it does.
Despite the changes in Government that take place at elections, there have been certain basic liberties that all of us, wherever we stand in the political spectrum, have taken for granted. But over the past six months that confidence in the protection of basic liberties, which is every Government's first duty, has been eroded and destroyed by the Government's actions in taking away trade union rights, taking away such basic human rights that they have been successfully challenged at the European Court, increasing the arbitrary use of police powers, ensuring that those who commit a mere disciplinary offence that is in no sense a challenge to national security may be gaoled for six months, and abolishing elections—a proposition so transparently repugnant to any principle of democracy that we are told that even the Prime Minister had second thoughts before agreeing with the Secretary of State.
Those actions, together with this Bill, add up to an erosion of basic liberties and of a dangerous drift towards an increasingly centralised and authoritarian state.
The right hon. and learned Member for Hexham (Mr. Rippon) said that perhaps we have a new breed of Conservatives today. By God, we have—men like the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant). The truth about the new breed of Conservatives and the Conservative party is that their actions have no parallel in the worthy history of that party.


The only parallels of the actions that the Conservatives have been taking over the past six months are to be found in the alien traditions of Right-wing continental parties.
If Conservative Members dislike those parallels, perhaps they will bear in mind that the only example that we can find of any Government in Europe abolishing elections was that of Benito Mussolini. Conservative Members laugh, but they should remember that they have been damned out of the mouths of their own supporters. The Right-wing hon. Member for Hendon, North (Mr. Gorst) said in The Observer last month that the GCHQ union ban was
the nasty thin wedge of Fascism.
Conservative Members have said that this Bill leads down the road towards elective dictatorship. A party born to defend individual liberty and to protect individuals from the overweening power of the state is, step by step, destroying basic liberties.
To justify this repugnant and ugly Bill, the Secretary of State has resorted to vulgar and unsubstantiated abuse of individual local authorities, democratically elected by their voters. He has accused them of irresponsibility, and ignored us when we challenged and met each of those arguments and pointed out, for example, that Newcastle's expenditure over the past four years, far from rising irresponsibly, has not only increased far less than Government expenditure but far less than the rate of inflation.
When we have met every argument—for example, the wholly unfounded claim by the hon. Member for Derbyshire, South (Mrs. Currie) that Lewisham spent £100,000 on a pantomime, a claim without foundation—the Secretary of State displays an appalling contempt for the electorate in what he seeks to do. He displays the staggering arrogance that is the mark of dictators and semi-dictators. Conservative Members who are laughing now have not been in the Chamber to hear their own hon. Friends condemning this Bill in rounder terms than Labour Members have done. The Secretary of State has been seeking to substitute his dictatorial view of what the electorate of individual areas wish and vote through the ballot box for.
The threadbare justification for this measure is confounded by the weight and depth of the attack against the measure from Conservative Members, and not just by the attack from Labour Members. In debate after debate an overwhelming majority of Conservative Members have opposed this measure, first on the grounds of its lack of practicability. It cannot achieve what it sets out to achieve. I point out to the hon. Member for Bury St. Edmunds that there is no way in which, even if the Secretary of State emasculates the services of 20 authorities, the Bill can achieve the savings that the Chancellor of the Exchequer claims to be necessary as a justification for the Bill. At the most, he can save £200 million when he has told us that he wants £1,500 million. The only way he can achieve that is by rate capping every local authority by using part II.
Secondly, Conservative right hon. and hon. Members have challenged the Bill because of the offence that it gives to our constitution, and the importance of local government within that constitution, and, above all, because of the offence that the Bill gives to long-held principles of the Conservative party, which claims to defend individual liberties and to hold out against the

potential tyranny of the House. The Under-Secretary claimed that his book is full of references to local government, but there is not one in the index.

Mr. Eldon Griffiths: Not that book again.

Mr. Straw: Yes. If the Under-Secretary would follow what he wrote over five years ago, he would be voting with us against this Bill. He complained then of Ministers
brandishing the theory of the detailed mandate in the face of reasoned argument, the legal power of a British majority in the House of Commons has increased, is increasing, and ought to be diminished.
As the scriptures tell us, those who sow
the wind … shall reap the whirlwind.
The battle to save the local democracy that this Bill seeks to destroy does not end with this Third Reading, if Third Reading there be — it has only just begun. The Government do not know what they are taking on when they seek to destroy basic principles held dear and shared by both sides of the House for 100 years.

Mr. Waldegrave: For some reason, my hon. Friend the Member for Huntingdon (Mr. Major) said to me just now, "Can't we find a way of giving the hon. Gentleman another 10 minutes?" I do not know whether my hon. Friend had any reason to be in doubt about the overwhelming majority of the Government at the end of the debate, but I think that the hon. Member for Blackburn (Mr. Straw) was doing his best. If I had to use a single word about his speech, I would say that it was humbug. I say to my hon. Friends who have been critics in terms of the standard of debate, "Thank goodness for you."
It was necessary for the Opposition to establish various matters, and for the Government to establish various matters in the debate. We have established—and the hon. Member for Blackburn admitted it in Committee—that the Bill derives from, and is necessary to, the Government's central economic strategy. Thoughtful critics like my right hon. Friend the Member for Guildford (Mr. Howell) admitted that, and agreed with it. My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) made that point strongly, and was right to do so. The essential nature of the Bill to the management of the economy has been established as well by our critics as it has been by our supporters.
We have established that part I of the Bill will enable us to make a reality of the pledges that my right hon. Friend and I gave at the Dispatch Box to bring help to the low spenders because, for the first time, we shall have the power to curb the high spenders, and the Bill is essential for that, too.
With the concession that my right hon. Friend has made today of taking some of the assurances which he made to the Committee, and to the House, and putting them into the Bill, he has made clear that the purpose of the Bill, whether part I or part II, is not to cause problems for those authorities which have sought to do their duty by the national interest, to spend less, and to respond to the guidelines laid down by central Government. I think that my right hon. Friend has reassured many hon. Members who may have had doubts on that score.
We have established that the Bill—and this was established clearly in Committee—is already having its effect on the rating decisions and the spending decisions of those who fear its impact. That point was made strongly


by my hon. Friend the Member for Newcastle under Tyne, Central (Mr. Merchant), in a telling intervention in Committee. I can reinforce what he said from what I have been told by the councillors in my county of Avon, where the same thing is happening.
We established in the course of the debate why the Bill is necessary—and no Conservative is happy to come to the House and ask for such powers—in terms of the weakening connection between voting and spending that has brought the system into disrepute, and has left the ratepayers in too many areas with systems that do not protect them because the source of the money, in terms of central Government grant, in terms of the commercial ratepayer and in terms of the necessary effect of welfare payments on those who pay rates has been such as to weaken the nexus between spending and taxpayers.
We have won that argument, and there is no question about it. That is why we have had to ask the House to put its power and its authority into the balance to protect ratepayers in those areas. That is a traditional duty of the House in such circumstances, of which the House can be rightly proud. Although we would much prefer it if the self-righting mechanisms of local government were doing their jobs by themselves, since they are not, we need have no doubts that it was right that the power of the House should be put into the balance on the side of the ratepayer.
To show that these great gains, which no hon. Member has been able to challenge seriously, were not enough, opponents of the Bill would have had to show that there was something so fundamentally wrong with it constitutionally that it should not be supported. However, I fear that they have not done that.
We have listened with great respect to hon. Members who have doubts on the issue, but no hon. Member has shown any reason to doubt that the House for years has had the right and the duty to control public spending as a whole, and local authority spending is part of public spending. No hon. Member has said that that is the constitutional right and duty of the House. That principal part of the constitutional argument has gone unchallenged.
Of course as Conservatives we fear over-centralisation, and we are right to do so, but when we find a great section of public expenditure which is effectively not responding to the controls laid down by the House, and voted on by the House, year after year, there are two options only. One would have been to take services away from local authorities, and to bring them under the direct control of the House. That would have been a far more centralising course, which would have weakened local authorities much more fundamentally. Surely, given that choice, it is right to seek to make the control of the House over public expenditure more effective by adjustment to the system.
Despite the best efforts of the hon. Member for Blackburn, it has not been shown that the Bill will not work. Thoughtful critics have conceded that point. My right hon. Friend the Member for Guildford did not deploy the argument that the Bill would not work because it would not have been a true argument.
The hon. Member for Islington, South and Finsbury (Mr. Smith), one of the most intelligent and assiduous of Committee members—I hope that that remark does not cause him trouble—in an exchange with my right hon. Friend yesterday, made it perfectly clear that he well understood that the Bill would have the effect that we claim on the aggregates of public expenditure. No one has been able to show that the Bill will not work.

Mr. Chris Smith: rose—

Mr. Waldegrave: There are only five minutes remaining. For once, I shall ask the hon. Gentleman to give me the last word — something which, in Committee, he was never willing to do.
We shall send to another place a Bill that we have brought forward to carry into law essential commitments from a manifesto that is barely a year old. It received a plurality of the votes in the country and a majority in the House—of a size which few Governments in modern times have had. The Bill has passed its principal stages with majorities of 100 or more. It has become increasingly popular among Conservative supporters and others outside the House.
We must listen to another voice, as we have listened with respect to the well organised voice of local authority associations and to the eloquent voices of our critics in the House. That voice is represented in large numbers on the Conservative Benches. It is the voice of those who came to the House rightly believing that the promise of the Bill was one of the things that brought them to the House. We do not intend to renege on the commitment that we all made at the general election. That commitment was not some small print in a document attached to the manifesto; it was a central commitment that we used on the doorstep and found helpful with the voters.
In Committee we faced a most amiable Opposition. Indeed, it was a lackadaisical Opposition who at no point won the serious arguments. They made not even a dent in the intellectual, constitutional or moral case for the Bill. The fact that the Bill will work is admitted as much by its critics as by its friends. The fact that it is central to our economic policy is also admitted by its critics as well as its friends. No one can deny that it was central to our manifesto or that it has passed through the House in the most resounding style. I have absolutely no doubt—

Mr. Cowans: The Minister should look behind him.

Mr. Waldegrave: The hon. Gentleman invites me to look behind. I shall do so because I know that the support that my right hon. Friend and the Government will receive for the Bill tonight reflects support in the Conservative party throughout the land.
I respect and have listened to the argument of what, with the utmost respect, I must call the vested interests of the local authority associations. Of course, they must defend their corner. It is right that they should do so. Ultimately, the House must make a judgment about the overall benefits. That judgment has been made clear and, I hope, will remain clear. I have no hesitation in recommending the Bill to my right hon. and hon. Friends.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 326, Noes 201.

Division No. 211]
[9.59 pm


AYES


Adley, Robert
Baker, Nicholas (N Dorset)


Aitken, Jonathan
Baldry, Anthony


Alexander, Richard
Banks, Robert (Harrogate)


Alison, Rt Hon Michael
Batiste, Spencer


Ancram, Michael
Bellingham, Henry


Arnold, Tom
Bendall, Vivian


Ashby, David
Bennett, Sir Frederic (T'bay)


Aspinwall, Jack
Berry, Sir Anthony


Atkins, Robert (South Ribble)
Best, Keith


Atkinson, David (B'm'th E)
Bevan, David Gilroy


Baker, Rt Hon K. (Mole Vall'y)
Biffen, Rt Hon John






Biggs-Davison, Sir John
Gower, Sir Raymond


Blaker, Rt Hon Sir Peter
Grant, Sir Anthony


Body, Richard
Greenway, Harry


Bonsor, Sir Nicholas
Gregory, Conal


Bottomley, Peter
Griffiths, E. (B'y St Edm'ds)


Boyson, Dr Rhodes
Griffiths, Peter (Portsm'th N)


Brandon-Bravo, Martin
Grist, Ian


Bright, Graham
Ground, Patrick


Brinton, Tim
Grylls, Michael


Brittan, Rt Hon Leon
Gummer, John Selwyn


Brown, M. (Brigg &amp; Cl'thpes)
Hamilton, Hon A. (Epsom)


Browne, John
Hamilton, Neil (Tatton)


Bruinvels, Peter
Hampson, Dr Keith


Bryan, Sir Paul
Hanley, Jeremy


Buck, Sir Antony
Hannam,John


Budgen, Nick
Harris, David


Burt, Alistair
Harvey, Robert


Butcher, John
Haselhurst, Alan


Butler, Hon Adam
Havers, Rt Hon Sir Michael


Butterfill, John
Hawkins, Sir Paul (SW N'folk)


Carlisle, John (N Luton)
Hawksley, Warren


Carlisle, Kenneth (Lincoln)
Hayes, J.


Carttiss, Michael
Hayhoe, Barney


Chalker, Mrs Lynda
Hayward, Robert


Channon, Rt Hon Paul
Heathcoat-Amory, David


Chapman, Sydney
Heddle, John


Chope, Christopher
Henderson, Barry


Churchill, W. S.
Heseltine, Rt Hon Michael


Clark, Dr Michael (Rochford)
Hickmet, Richard


Clark, Sir W. (Croydon S)
Hill, James


Clarke, Rt Hon K. (Rushcliffe)
Hind, Kenneth


Clegg, SirWalter
Hirst, Michael


Cockeram, Eric
Hogg, Hon Douglas (Gr'th'm)


Colvin, Michael
Holland, Sir Philip (Gedling)


Conway, Derek
Holt, Richard


Coombs, Simon
Hooson, Tom


Cope, John
Hordern, Peter


Corrie, John
Howard, Michael


Couchman, James
Howarth, Gerald (Cannock)


Cranborne, Viscount
Howe, Rt Hon Sir Geoffrey


Crouch, David
Howell, Rt Hon D. (G'ldford)


Currie, Mrs Edwina
Howell, Ralph (N Norfolk)


Dickens, Geoffrey
Hubbard-Miles, Peter


Dicks, Terry
Hunt, David (Wirral)


Dorrell, Stephen
Hunt, John (Ravensbourne)


Douglas-Hamilton, Lord J.
Hunter, Andrew


Dover, Den
Hurd, Rt Hon Douglas


du Cann, Rt Hon Edward
Irving, Charles


Dunn, Robert
Jackson, Robert


Durant, Tony
Jenkin, Rt Hon Patrick


Edwards, Rt Hon N. (P'broke)
Jessel, Toby


Eggar, Tim
Jones, Gwilym (Cardiff N)


Emery, Sir Peter
Jones, Robert (W Herts)


Evennett, David
Joseph, Rt Hon Sir Keith


Eyre, Sir Reginald
Kellett-Bowman, Mrs Elaine


Fallon, Michael
Kershaw, Sir Anthony


Farr, John
Kilfedder, James A.


Favell, Anthony
King, Roger (B'ham N'field)


Fenner, Mrs Peggy
King, Rt Hon Tom


Finsberg, Sir Geoffrey
Knight, Gregory (Derby N)


Fletcher, Alexander
Knight, Mrs Jill (Edgbaston)


Fookes, Miss Janet
Knowles, Michael


Forman, Nigel
Lamont, Norman


Forsyth, Michael (Stirling)
Lang, Ian


Forth, Eric
Lawler, Geoffrey


Fowler, Rt Hon Norman
Lawrence, Ivan


Fox, Marcus
Lawson, Rt Hon Nigel


Franks, Cecil
Leigh, Edward (Gainsbor'gh)


Fraser, Peter (Angus East)
Lennox-Boyd, Hon Mark


Fry, Peter
Lester, Jim


Gale, Roger
Lilley, Peter


Galley, Roy
Lloyd, Ian (Havant)


Gardiner, George (Reigate)
Lloyd, Peter, (Fareham)


Gardner, Sir Edward (Fylde)
Lord, Michael


Garel-Jones, Tristan
Lyell, Nicholas


Glyn, Dr Alan
McCrindle, Robert


Goodhart, Sir Philip
McCurley, Mrs Anna


Goodlad, Alastair
Macfarlane, Neil


Gorst, John
MacGregor, John


Gow, Ian
MacKay, Andrew (Berkshire)





MacKay, John (Argyll &amp; Bute)
Shaw, Giles (Pudsey)


Maclean, David John
Shaw, Sir Michael (Scarb')


McQuarrie, Albert
Shelton, William (Streatham)


Major, John
Shepherd, Colin (Hereford)


Malins, Humfrey
Shepherd, Richard (Aldridge)


Malone, Gerald
Silvester, Fred


Maples, John
Sims, Roger


Marland, Paul
Skeet, T. H. H.


Marlow, Antony
Smith, Sir Dudley (Warwick)


Maude, Hon Francis
Smith, Tim (Beaconsfield)


Maxwell-Hyslop, Robin
Soames, Hon Nicholas


Mayhew, Sir Patrick
Spencer, Derek


Mellor, David
Spicer, Jim (W Dorset)


Merchant, Piers
Spicer, Michael (S Worcs)


Miller, Hal (B'grove)
Squire, Robin


Mills, Iain (Meriden)
Stanbrook, Ivor


Mills, Sir Peter (West Devon)
Stanley, John


Miscampbell, Norman
Stern, Michael


Mitchell, David (NW Hants)
Stevens, Lewis (Nuneaton)


Moate, Roger
Stevens, Martin (Fulham)


Monro, Sir Hector
Stewart, Allan (Eastwood)


Montgomery, Fergus
Stewart, Ian (N Hertf'dshire)


Moore, John
Stokes, John


Morris, M. (N'hampton, S)
Stradling Thomas, J.


Morrison, Hon P. (Chester)
Sumberg, David


Moynihan, Hon C.
Tapsell, Peter


Mudd, David
Taylor, John (Solihull)


Murphy, Christopher
Taylor, Teddy (S'end E)


Neale, Gerrard
Tebbit, Rt Hon Norman


Needham, Richard
Temple-Morris, Peter


Nelson, Anthony
Terlezki, Stefan


Neubert, Michael
Thatcher, Rt Hon Mrs M.


Newton, Tony
Thomas, Rt Hon Peter


Nicholls, Patrick
Thompson, Donald (Calder V)


Normanton, Tom
Thompson, Patrick (N'ich N)


Onslow, Cranley
Thornton, Malcolm


Oppenheim, Philip
Thurnham, Peter


Oppenheim, Rt Hon Mrs S.
Townend, John (Bridlington)


Osborn, Sir John
Townsend, Cyril D. (B'heath)


Ottaway, Richard
Tracey, Richard


Page, John (Harrow W)
Trotter, Neville


Page, Richard (Herts SW)
Twinn, Dr Ian


Parris, Matthew
van Straubenzee, Sir W.


Patten, John (Oxford)
Vaughan, Sir Gerard


Pattie, Geoffrey
Viggers, Peter


Pawsey, James
Wakeham, Rt Hon John


Peacock, Mrs Elizabeth
Waldegrave, Hon William


Pink, R. Bonner
Walden, George


Pollock, Alexander
Walker, Bill (T'side N)


Porter, Barry
Walker, Rt Hon P. (W'cester)


Powell, William (Corby)
Waller, Gary


Powley, John
Walters, Dennis


Price, Sir David
Ward, John


Prior, Rt Hon James
Wardle, C. (Bexhill)


Proctor, K. Harvey
Warren, Kenneth


Rathbone, Tim
Watson, John


Rees, Rt Hon Peter (Dover)
Watts, John


Renton, Tim
Wells, Bowen (Hertford)


Rhodes James, Robert
Wells, John (Maidstone)


Rhys Williams, Sir Brandon
Wheeler, John


Ridley, Rt Hon Nicholas
Whitfield, John


Ridsdale, Sir Julian
Whitney, Raymond


Roberts, Wyn (Conwy)
Wiggin, Jerry


Robinson, Mark (N'port W)
Wilkinson, John


Roe, Mrs Marion
Wolfson, Mark


Rossi, Sir Hugh
Wood, Timothy


Rost, Peter
Woodcock, Michael


Rowe, Andrew
Yeo, Tim


Rumbold, Mrs Angela
Young, Sir George (Acton)


Ryder, Richard
Younger, Rt Hon George


Sackville, Hon Thomas



Sainsbury, Hon Timothy
Tellers for the Ayes:


Sayeed, Jonathan
Mr. Carol Mather and Mr. Robert Boscawen.


Scott, Nicholas





NOES


Alton, David
Ashley, Rt Hon Jack


Anderson, Donald
Ashton, Joe


Archer, Rt Hon Peter
Atkinson, N. (Tottenham)


Ashdown, Paddy
Bagier, Gordon A. T.






Banks, Tony (Newham NW)
Eastham, Ken


Barnett, Guy
Ellis, Raymond


Barron, Kevin
Evans, John (St. Helens N)


Beaumont-Dark, Anthony
Fatchett, Derek


Beckett, Mrs Margaret
Faulds, Andrew


Beith, A. J.
Field, Frank (Birkenhead)


Benn, Tony
Fisher, Mark


Bennett, A. (Dent'n &amp; Red'sh)
Flannery, Martin


Benyon, William
Foot, Rt Hon Michael


Bermingham, Gerald
Forrester, John


Bidwell, Sydney
Foster, Derek


Blair, Anthony
Fraser, J. (Norwood)


Boothroyd, Miss Betty
Freeman, Roger


Boyes, Roland
Freeson, Rt Hon Reginald


Bray, Dr Jeremy
Freud, Clement


Brown, Gordon (D'f'mline E)
Garrett, W. E.


Brown, Hugh D. (Provan)
George, Bruce


Brown, N. (N'c'tle-u-Tyne E)
Gilmour, Rt Hon Sir Ian


Brown, Ron (E'burgh, Leith)
Godman, Dr Norman


Bruce, Malcolm
Gould, Bryan


Buchan, Norman
Hamilton, James (M'well N)


Callaghan, Jim (Heyw'd &amp; M)
Hardy, Peter


Campbell, Ian
Harman, Ms Harriet


Campbell-Savours, Dale
Harrison, Rt Hon Walter


Canavan, Dennis
Hart, Rt Hon Dame Judith


Carter-Jones, Lewis
Hattersley, Rt Hon Roy


Cartwright, John
Heffer, Eric S.


Clark, Dr David (S Shields)
Hogg, N. (C'nauld &amp; Kilsyth)


Clarke, Thomas
Holland, Stuart (Vauxhall)


Clay, Robert
Home Robertson, John


Cocks, Rt Hon M. (Bristol S.)
Howell, Rt Hon D. (S'heath)


Cohen, Harry
Howells, Geraint


Coleman, Donald
Hoyle, Douglas


Concannon, Rt Hon J. D.
Hughes, Dr. Mark (Durham)


Conlan, Bernard
Hughes, Robert (Aberdeen N)


Cook, Frank (Stockton North)
Hughes, Roy (Newport East)


Corbett, Robin
Hughes, Sean (Knowsley S)


Corbyn, Jeremy
Janner, Hon Greville


Cormack, Patrick
Jenkins, Rt Hon Roy (Hillh'd)


Cowans, Harry
John, Brynmor


Cox, Thomas (Tooting)
Johnston, Russell


Craigen, J. M.
Jones, Barry (Alyn &amp; Deeside)


Crowther, Stan
Kaufman, Rt Hon Gerald


Cunningham, Dr John
Kennedy, Charles


Davies, Rt Hon Denzil (L'lli)
Kilroy-Silk, Robert


Davies, Ronald (Caerphilly)
Kirkwood, Archibald


Davis, Terry (B'ham, H'ge H'l)
Lambie, David


Deakins, Eric
Lamond, James


Dobson, Frank
Lewis, Ron (Carlisle)


Dubs, Alfred
Lewis, Terence (Worsley)


Dunwoody, Hon Mrs G.
Litherland, Robert


Eadie, Alex
Lloyd, Tony (Stretford)





Lofthouse, Geoffrey
Roberts, Ernest (Hackney N)


McCartney, Hugh
Robinson, G. (Coventry NW)


McCusker, Harold
Robinson, P. (Belfast E)


McDonald, Dr Oonagh
Rooker, J. W.


McGuire, Michael
Ross, Ernest (Dundee W)


McKay, Allen (Penistone)
Ross, Wm. (Londonderry)


McKelvey, William
Sedgemore, Brian


Mackenzie, Rt Hon Gregor
Sheerman, Barry


McNamara, Kevin
Sheldon, Rt Hon R.


McTaggart, Robert
Shore, Rt Hon Peter


McWilliam, John
Short, Ms Clare (Ladywood)


Madden, Max
Short, Mrs H.(W'hampt'n NE)


Marek, Dr John
Silkin, Rt Hon J.


Marshall, David (Shettleston)
Skinner, Dennis


Martin, Michael
Smith, C.(Isl'ton S &amp; F'bury)


Mason, Rt Hon Roy
Smith, Rt Hon J. (M'kl'ds E)


Maxton, John
Snape, Peter


Maynard, Miss Joan
Soley, Clive


Meacher, Michael
Spearing, Nigel


Meadowcroft, Michael
Steel, Rt Hon David


Meyer, Sir Anthony
Steen, Anthony


Michie, William
Strang, Gavin


Millan, Rt Hon Bruce
Straw, Jack


Miller, Dr M. S. (E Kilbride)
Thomas, Dafydd (Merioneth)


Mitchell, Austin (G't Grimsby)
Thomas, Dr R. (Carmarthen)


Molyneaux, Rt Hon James
Thompson, J. (Wansbeck)


Morris, Rt Hon J. (Aberavon)
Thorne, Stan (Preston)


Morrison, Hon C. (Devizes)
Tinn, James


Nellist, David
Torney, Tom


Nicholson, J.
Wainwright, R.


O'Brien, William
Walker, Cecil (Belfast N)


O'Neill, Martin
Wallace, James


Orme, Rt Hon Stanley
Wardell, Gareth (Gower)


Patchett, Terry
Weetch, Ken


Pavitt, Laurie
Welsh, Michael


Penhaligon, David
White, James


Pike, Peter
Wigley, Dafydd


Powell, Rt Hon J. E. (S Down)
Williams, Rt Hon A.


Powell, Raymond (Ogmore)
Winnick, David


Prentice, Rt Hon Reg
Winterton, Nicholas


Prescott, John
Woodall, Alec


Radice, Giles
Young, David (Bolton SE)


Randall, Stuart



Rees, Rt Hon M. (Leeds S)
Tellers for the Noes:


Richardson, Ms Jo
Mr. Don Dixon and Mr. Frank Haynes.


Rippon, Rt Hon Geoffrey



Roberts, Allan (Bootle)

Question accordingly agreed to.

Bill read the Third time, and passed.

Orders of the Day — Mineworkers (Pensions and Concessionary Coal)

The Under-Secretary of State for Energy (Mr. Giles Shaw): I beg to move,
That the draft Mineworkers' Pension Scheme (Limit on Contributions) Order 1984, which was laid before this House on 7th March, be approved.

Mr. Speaker: I understand that it is for the convenience of the House to take this and the following order together in a three-hour debate:
That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1984, which was laid before this House on 9th March, be approved.
I remind the House of what I said this afternoon about what would be in order in this debate.

Mr. Shaw: The redundant mineworkers' payments scheme has been supported by successive Governments since 1967. It is a firm recognition that Governments of both parties support the industry. It also recognises the unique problems associated with restructuring the coalfield and with the dependent communities in the coal industry.
The problems associated with closures have been a constant feature of the coal industry, as they have been with all extractive industries, and the closure of pits has become an annual feature for many years. On the other hand, in the 1974 "Plan for Coal" there was a specific reference to the need to reduce capacity at an annual level, planned at that time to be between 3 million and 4 million tonnes per annum, and that was the forecast rate for the whole of the plan period.
That level, as the House will be aware, was never achieved. Indeed, about half that rate was the annual average. But in 1983–84, in the year just ending, with 15 closures and several mergers, about 20,000 miners left the industry voluntarily. For the year 1984–85 the board announced a similar reduction in capacity of about 4 million tonnes. That is related to the fact that, after many years, the lack of movement in the closure of uneconomic pits has now caught up with the industry. The rate of closure was forecast as long ago as 1974.
It is right that the House, and especially the Government should review the redundant mineworkers payment scheme to ensure that its provisions are improved as necessary and that, as transfers inevitably become more difficult to achieve, it reflects properly, as the House would wish, the contraction of this industry. The scheme enables mineworkers, cokeworkers and certain workers employed in the provision of ancillary services who are made redundant to receive redundancy payments beyond those that the industry can afford. Support given in that way is, of course, additional to that provided in the form of deficit and social grants to the NCB. The House will be only too aware of the seriousness of the NCB's financial position. That has been emphasised in the House on a number of occasions, including recently in the debate on the special Supplementary Estimates.
Against that background, the order is evidence, if evidence were needed, of the massive continuing support that should be given to the coal industry. With this substantial financial support the industry can look to a

viable future. Because the Government seek to back the industry in moves towards a viable future, we trust that the House will approve the enhancement of the scheme contained in the order.
Leaving aside the adjustments to the table of weekly benefits and other detailed provisions made in what, inevitably, is a complex order—I am conscious of the fact that Opposition Members are perhaps more experienced than I in dealing with the complexities of this scheme— the fact remains that there are significant changes to which I wish to draw the attention of the House. Essentially, there are three new provisions. First, in article 16, improved provision is made for those made redundant and aged over 21 but under 50 who, it is proposed, will receive a single lump sum equivalent to £1,000 per year of service. That provision replaces the arrangement made under the 1983 order whereby that group received two smaller lump sums dependent on age and previous earnings, in addition to length of service.
When a pit closes, it is the board's policy, wherever possible, to offer men who wish to stay in the industry alternative jobs at other pits, and to make redundant older men who are willing to leave on the terms available. It is a measure of the effort the board puts into this that, of the men directly affected by pit closures this year, which closes on 31 March, who were not retained on salvage work at the pits in question, over 75 per cent. were found jobs at other pits. It is a measure of the success of this policy that, despite a reduction in mining manpower of about 20,000, there were no compulsory redundancies among men wishing to stay in the industry.
I make it clear to the House that the board seeks to continue that policy. A statement made by the NCB chairman as recently as 23 March made that clear when he said:
At the pits now under review every man who wants to stay with us will be offered another job in the industry.
That includes those at Cottonwood colliery in south Yorkshire. The board's objective is to continue to avoid compulsory redundancy throughout the industry.

Mr. Tony Marlow: Problems occurred in Northamptonshire where footwear companies closed down, and there were large-scale redundancies in the shoe industry. Over the past years, there has been a reduction in work in the footwear industry commensurate with a reduction in the coal mining industry. Can my hon. Friend explain why it is that Government after Government provide massive redundancy payments to those who are declared redundant in a nationalised industry, whereas private industry gets none of those perks and benefits? What is wrong with private industry that it does not deserve to get the benefit given to nationalised industry?

Mr. Shaw: I appreciate fully the sincerity with which my hon. Friend asks that question. Many persons, both within the House and outside, have cast an extremely envious eye on the way in which Governments of both persuasions have treated the coal industry financially in times past. However, we must recognise that we have an enormous stake in the massive energy industry. We must recognise also that from the redundancy schemes that are being laid before the House there is the possibility of a return to viability. It is because of that prospect that the Government come before the House hoping to ensure support for an additional scheme.

Mr. Dennis Skinner: Does the Minister agree that irrespective of the extra redundancy payments, the cost of closing a pit, taking into account redundancy payments and various other benefits, is about twice as much as the cost of keeping it open?

Mr. Tim Eggar: No.

Mr. Skinner: A pit may be uneconomic in one year but economic the next. What will be the additional cost of closure when the additional redundancy payments take effect, which are destined to throw more people on to the dole?

Mr. Shaw: I am sure that the hon. Gentleman would be the first to say that each pit must be treated individually. It is not easy to make a complete response to his question. However, the calculations show beyond doubt that within three years the public expenditure benefits from the maintenance of the coal industry will be substantial despite the large benefits that are being offered in redundancy pay. The long-term benefits to the industry and the Exchequer are proven and the benefits will be available within three years of taking the proposed action.
We recognise that the geographical distribution of the pits and the age distributions of the miners are now such that, following the board's announcement of the planned reduction in output in 1984–85 to 97·4 million tonnes, some younger men may leave the industry. We are therefore proposing improved provision for those aged 21–50 because we believe that those who leave, often after many years in the industry, should be treated generously. We believe also that it is right that the Government should help the board to maintain the policy of avoiding compulsory redundancies wherever possible. That policy has been pursued with some success to date.

Mr. Geoffrey Lofthouse: Does the Minister agree that if one of the younger miners under 50 years of age agrees to take the redundancy terms, it will not be possible for Mr. MacGregor to fulfil his promise to offer alternative employment to all miners whose pits are closing?

Mr. Shaw: I appreciate that, but I think that the hon. Gentleman will know that in many instances older miners at pits which are to remain open have volunteered for redundancy so that younger men at pits which are closing may be found additional jobs. I accept that flexibility is required. There is no formula that I am aware of which will serve to calculate how many men under 50 will be involved in redundancies in the coming year. However, we felt it right to make the necessary provision in the order.
Secondly, I draw the attention of the House to article 10. Provision is made to enable those receiving weekly benefit to take holidays abroad without losing all entitlement for the period that they are outside the United Kingdom. The House will know, especially the hon. Member for Midlothian (Mr. Eadie), that the matter was raised on many occasions with my predecessor. It is one that has been raised consistently during debates on orders of this character. I trust that the hon. Member for Midlothian will welcome the change and that the House will agree that the draft order should be approved so that from 1 April 1984 it will apply to all those receiving weekly benefit irrespective of the date of their redundancy.
Thirdly, in article 17 we have introduced further protection for those whose redundancy payments would

otherwise be reduced due to breaks in service occasioned by incapacity. The loss of redundancy payments due to breaks in service arising out of illness and injury is a mailer of great concern to Members on both sides of the House and was a major issue during the consideration of the Coal Bill in Committee. I recall in particular the concern expressed by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) and by other Labour Members. We have agreed to make a change in the redundancy order now before the House. The hon. Member for Pontefract and Castleford (Mr. Lofthouse) has campaigned tirelessly to ensure that those of us with responsibility for the scheme should not lose sight of the hardship that such breaks in service can cause in individual cases.
I have, therefore, reviewed with care the incidence of such breaks and their treatment under the previous RMPS. I am satisfied that the scheme's provisions that were first introduced in the 1983 order, disregarding periods during which an employee received an incapacity pension under the Coal Industry Nationalisation (Superannuation) Regulations 1950, are both fair and reasonable. I have reconfirmed that such incapacity can be through sickness or injury, and can be physical or mental. I am also satisfied that the provisions of the Employment Protection (Consolidation) Act 1978, which determines statutory minimum redundancy payments for all workers, can have a severe impact in the particular circumstances of the coal industry. Hence, the 1984 order now before the House introduces a further payment in such cases, which is designed to ensure that the total redundancy entitlement is not adversely affected by such breaks due to incapacity.
Although it is not strictly part of the new order, I trust that hon. Members will approve when I say that I have decided that ex gratia payments shall be made to those workers made redundant between 11 March 1981 and the date when the provisions will come into effect, to deal with the breaks in service that I have just outlined. I believe that that would remove the injustices of which the Opposition have complained for some time.

Mr. Michael McGuire: We are all grateful to hear that news from the Under-Secretary. Does the Minister agree that it follows that breaks in service that have denied a miner concessionary coal—he knows that I am pursuing such a case—will be brought within the scheme? If the Minister could answer that, he would make my day even more joyful.

Mr. Shaw: I am very concerned about concessionary coal and breaks in service, which is a live issue, as the hon. Gentleman and the hon. Member for Bolsover (Mr. Skinner) appreciate. Equally, the hon. Gentleman knows that arrangements for concessionary coal have been negotiated by the unions and that they vary in different areas. It is not easy to find a simple answer to this genuine problem. Although I am not prepared to give the hon. Gentleman the assurance that he seeks, I accept that there is a modest anomaly.
I hope that hon. Members on both sides of the House will accept that the changes that I have outlined do not represent a radical departure from previous years, but add up to an important package of improvements underlining the Government's continuing support to the individuals who are affected by redundancy. It is also designed to create in a humane and civilised way an effective and viable industry that is capable of offering secure employment in the longer term.
I shall deal briefly with the second order concerning pension adjustments, which follows the standard form of earlier years.

Mr. Den Dover: Before the Minister turns to deal with the second order, will he clarify a point? In answer to an Opposition Member, he said that older miners working at a pit that is not due for closure could take early redundancy, thereby providing a vacancy for another worker. Surely only miners working at pits that are to be closed can get redundancy. Under this scheme, any miner coming up to his last working year can get a high redundancy payment, which is not the best use of public funds.

Mr. Shaw: My hon. Friend should be aware that in the restructuring of an industry it is crucial to have enough flexibility to allow the transfer of work forces where that can be achieved. It would be beneficial for public funds if that were done. We must consider that in this industry we want a work force which, when correctly deployed in productive pits, will meet the requirements of the industry for a considerable time to come. I accept that there appears to be a widespread application of the theory that the individual pit is being closed is the only one to be affected, but redeployment requires consequential action at other pits.
The second order follows the standard form of earlier years. It continues the policy established through the National Coal Board (Finance) Act 1976, whereby the cost of meeting the deficiency in the mineworkers pension scheme fund resulting from the need to pay pensions to the large numbers of people who left the industry before 6 April 1975 is reimbursed through Government grants over the period to 1995. Each year when the level of pensions is increased, a higher level of deficiency contributions is required by the fund. The Government may reimburse them up to the level necessary to maintain the real level of pensions if they are satisfied that the NCB's finances do not permit of it taking on the additional burden. In the board's present financial circumstances, it will not surprise the House, there is no possibility of the board meeting that additional obligation.

Mr. T. H. H. Skeet: I am much obliged to my hon. Friend. He is aware that over the past 10 years about £277 million has been put into the fund by the Government, to top it up. We have heard that Mr. Scargill is determined to cut down the investment—that is, there will be no overseas investment and no investment in the oil industry and so on to help the beneficiaries. Does my hon. Friend have something to say about that? Why should the Government be prepared to put money into the scheme if the miners are not prepared to do their best for their country?

Mr. Shaw: My hon. Friend will not be surprised when I say that there is no way that I shall seek to comment upon a case that is currently before the courts. However, he will expect me to be robust and say that the sooner that we achieve viability within the coal industry, the better. Then, the board would be able to finance the modest increase in pensions each year. My hon. Friend is right. It has been a cumulative debt. However, a time limit of 1995 is attached to it.

Mr. Rob Hayward: My hon. Friend said that he hoped that the coal board would be helped to return to viability. May we assume that the schemes that we are considering will terminate when the NCB returns to viability and that the excessive expenditure on redundancies compared with that faced by people in private industry will not continue?

Mr. Shaw: I am well aware of my hon. Friend's feelings on the matter. The House should be clear that we are dealing with substantial increases in redundancy pay. We shall carry out an annual review of the redundancy payments scheme. The parent Act, the Coal Industry Act 1983, expires in 1986. There will be a regular review not only of the scheme, but of its costs. Therefore, I assure my hon. Friend that we are extremely concerned, as he is, to ensure that the sums are sufficient, but only sufficient, to do the job for which they are designed.
In the board's present financial circumstances, there is no possibility that it can make good the pension adjustment required under the order. Therefore, I hope that the House will agree that the second order, too, should be passed.
I am aware that in dealing with the germane matters relating to the two orders, hon. Members on both sides of the House will seek to debate wider issues, but it is right that we should lay the orders before the House and explain them. I shall do my best to answer questions towards the end of the debate. I commend the orders to the House.

Mr. Stanley Orme: We shall not oppose the orders. They make improvements in redundancy payments and modest improvements in the mineworkers pension scheme. I emphasise the word "modest". We debate these orders, against a background of 40,000 jobs having been lost in the past two or three years within the industry and with another 20,000 threatened in 1984–85. Twenty pits or more are threatened with closure. We are dealing with the livelihood of people working in a dangerous and dirty industry, which creates wealth for this nation. We are self-sufficient in coal and the coal will still be there many years after the oil and gas have been used up.
The debate on these orders is very important. Some might say that the proposals—not least the redundancy proposals—are extremely generous, but I do not think that they are. We are talking about young people who may well have great difficulty in finding other employment. The sum involved—£ 1,000 for each year in the industry — may seem large, but we shall lose some skilled miners for all time. They will not come back to the industry. To some extent one can appreciate and support, what is being done for the older miners who have had to face dust and the possibility of pneumoconiosis, but it is the young people whom the industry will need in the future. When the upturn in the economy arrives, we shall start getting gas, oil and chemicals from coal. We should be planning for the future, but the Government are not making any plans at the moment.

Mr. Eggar: Is the right hon. Gentleman in favour of making the redundancy offer to miners who are under 50 years of age, or is he not?

Mr. Orme: I thought that I had made it clear that we support the orders. Yes, I am in favour of that, but I am pointing out that the second order creates problems and


difficulties. It will make it possible to get rid of people from the industry, but there is the question of the younger men who are to replace the older men who are retiring.
Mr. MacGregor might like to use the scheme to allow redundancies to take place even in pits that are not scheduled for closure. That would be criminal. The industry would lose skilled men and craftsmen at a time when it is going to need them. If people were to leave the pits wholesale, that would not be beneficial to the industry or to those working in it.
It has been said that benefits in the private sector are not often as good as those in the public sector. I know that there are anomalies, but the truth of that statement depends upon which area of the private sector one has in mind. There are some very good golden handshakes in the higher echelons of the private sector. However, workers within a state industry should be treated properly, and in the case of redundancy proper provision should be made.

Mr. Peter Viggers: Will the right hon. Gentleman give way?

Mr. Orme: I must get on as many hon. Members wish to speak. I hope that the hon. Gentleman will forgive me. The orders contain the prospect of many young miners being paid a lump sum and losing their job. Any mineworker between 25 and 50 years old will be able to receive £1,000 for each completed year of coal industry employment since the age of 16. The scheme includes those who work above ground as well as those who work at the coal face.
What is proposed might be the best way in which to persuade people to accept voluntary redundancy but it might not be the best way in which to help them afterwards. A man who has received a large redundancy payment will not be able to claim supplementary benefit as long as he has £3,000 left and no redundancy payment will provide enough capital for him to live off the income it generates. He might end up eating into his capital until it is reduced to £3,000, but he has no prospect of a job. The central problem is that mass unemployment means that a redundant mineworker will have great difficulty finding another job in or out of the coal industry. Is redundancy payment any compensation for the prospect of long-term unemployment that such miners will face?
There is always much talk of compensation for people who give up jobs in, for example, the coal, steel, shipbuilding, motor, dock, machine tool and textile industries, but where is the industry paying to take workers on? When did we last hear of an industry needing an extra 20,000 workers? If no industries are expanding their work force while some are reducing theirs, unemployment will continue to increase. These orders give us an opportunity to highlight our fears about the future of the coal mining industry.
Even if miners are on strike, there can be no doubt that they care about the future of the industry and their jobs. We want the industry to expand and an end to pit closures and redundancies. Redundancies and the overtime ban show that the industry is facing a crisis. It is wrong for the Government to stand aside at this crucial time. We call on them to end coal imports, which threaten the industry's existence, to shelve Mr. MacGregor's so-called survival plan which is better named a destruction plan and to take immediate action to open tripartite talks. It is not good

enough for them to take a ringside seat now. They have an obligation to the nation, the industry and miners to ensure the industry's survival.
We have witnessed the negotiating machinery being swept aside at Polmaise in Scotland and Cortonwoocl in Yorkshire.
Mr. MacGregor talks about saving 4 million tonnes, but 1·4 million tonnes would come from the north-east and 0·75 million tonnes would come from Scotland. Therefore, two areas of Britain with high unemployment and facing the greatest rundown in industry would take 50 per cent. of those proposed cuts.
I put it bluntly to the House that Mr. MacGregor has got it wrong. He was wrong about the overtime ban and was forced to come back to the House for £135 million only a fortnight ago. He is not managing the industry with a view to planning for the future or developing the industry. He has a crude plan to cut down the industry and to get rid of some areas. We shall need those areas and that coal in the future.

The Secretary of State for Energy (Mr. Peter Walker): Does the right hon. Gentleman think that Mr. MacGregor's decisions to put £400 million into the Asfordby development and to spend more in annual capital investment than was spent in real terms in any year of the Labour Government are signs of a man trying to destroy an industry?

Mr. Orme: Those proposals fly in the face of what I have been putting to the House. In the Polmaise pit in Scotland, £15 million has been thrown aside. Mr. MacGregor does not have a concerted plan. He talks about wanting to develop certain areas and certain pits, for example in the west midlands and south Yorkshire, but we are talking about the coal industry as a whole—about Scotland, Kent and Yorkshire.

Mr. Peter Hardy: The Government have done remarkably little for the coal industry, but they are responsible for the Asfordby development, so they ought not give to Mr. MacGregor credit that they could reasonably claim for themselves.

Mr. Orme: I take my hon. Friend's point. Mr. MacGregor's proposals for a rapid rundown of the industry— not taking into account the long-term economic damage that he will cause in thinking that he can deal with the coal industry in the same way in which he dealt with the steel industry—are completely unacceptable.
The Government ought to shelve the MacGregor proposals, call a tripartite meeting and sit down with the NCB and the unions to work out a new "Plan for Coal". The previous "Plan for Coal" talked about 150 million tonnes. We are now talking about 97 million tonnes and Mr. MacGregor envisages a further reduction. There is talk of reducing the number of miners to 140,000. That is unacceptable.
There is an upturn in the coal industry. Britain provides the cheapest non-subsidised deep-mined coal in the world—coal from Poland and South Africa is subsidised—and we have the opportunity to propose developments to give us a viable and expanding industry, in which miners and the NCB can participate. These orders give us an opportunity to debate this issue, and I am sure that my hon. Friends will want to follow up this point. We are not opposing the orders, but we are opposing the Government's refusal to take action.

Several Hon. Members: rose

Mr. Speaker: Order. The House is aware that there is a great demand to speak in the debate. I call on hon. Members to speak briefly this evening.

Mr. Jim Lester: If ever there was a time to keep a clear head and indulge in cool thinking about these matters, particularly among those of us who have a real interest in the mining industry, and have had for a long time, now is the time. The speech of the right hon. Member for Salford, East (Mr. Orme) was a ragbag of facts, and does not help at all when we consider either these orders or the future of the coal industry.
It is understandable that the Opposition are not opposing these orders, and I pay tribute to the right hon. Member for being prepared to be rather more generous in his comments on them. He recognised that the orders have been thought through, and are a recognition of the pressures being put on the Government by all hon. Members for realistic changes to meet the changed circumstances in the industry. All of us recognise that change is difficult and unacceptable to many. With these orders, we are doing what the Conservative Government have consistently tried to do—to meet those needs they can, and to make the changes more acceptable.
Some of us remember the late 1960s, when the Labour Government were closing about 45 pits a year, and the miners in my area were out of work without any of these terms, when the discussions about what happened were minimal, and there was nothing like the sensitivity and concern that is now being shown for the industry.

Mr. Kevin Barron: How many miners were put out of work in the 1960s? Did they not move on to mines where there were jobs, which they cannot do today?

Mr. Lester: If I took the hon. Gentleman to Nottinghamshire, I could find him miners who have been out of work since then. The Nottinghamshire county council, of which the hon. Member for Ashfield (Mr. Haynes) was a member, had to provide alternative employment for many miners who were put out of work when the pits closed. That Government had to recognise drastic changes in the industry, because they then believed that there was a glut of oil. This Government, who are closing about 20 pits a year with a great deal more sensitivity, are trying hard to meet different circumstances.

Mr. Frank Haynes: The hon. Gentleman should not have said what he did because he has provoked me. Many pits were closed in Derbyshire, and many of the men came in to Nottinghamshire to work in the pits there. Things are different now. Men cannot get work at other pits. What MacGregor says is a load of rubbish.

Mr. Lester: I do not know whether the hon. Gentleman wants to be judged by his own load of rubbish. He will admit that we sat on the county council together, and the Conservative council introduced a pound for pound scheme to find alternative jobs in the Kirkby-in-Ashfield area, which is now in his constituency. I built a factory in that area to employ miners who were unemployed because of the pit closures.
The difference today is remarkable. The Government have invested £3·5 billions in new faces and pits, such as

Selby and Asfordby. That is a real commitment to the industry. The pay levels of the miners today are 26 per cent. above the average manufacturing wage. In those days, they were about half the manufacturing wage. The productivity deal done in the teeth of opposition from Labour Members has meant that the industry is producing coal at a far more economic rate. The coal burn in the electricity industry has been maintained. Other countries are now using coal. Far from letting the coal burn drop, we have increased it. These facts indicate the commitment of the Government to the coal industry.
We have introduced orders to try to encourage the mobility of the younger miners, about whom Opposition Members have spoken. We have introduced many schemes to encourage that essential element of trained young miners who are able to move into the new coalfields. I recognise, perhaps more than most, that closing coalmines is rather different from the closures and redundancies about which some of my hon. Friends have spoken. When closures happen within a community, often all the workers lose their jobs, and I am prepared to accept from Opposition Members that there are few options within such communities. In such cases, the offer of an alternative job is not the same as it would be in any other industry, because each pit has its community, and its hierarchy. After having been an important man in the community in one coalmine, a man can move, and find himself starting at the bottom in another coalmine. All these facts are understood and known. It does not alter the fact that, if we are to have a successful coal industry in future, it is not possible to invest the amount of money that is currently being invested to produce low-cost coal in the area in which it will be required. To ensure that investment leads to productivity we are producing coal in our best 20 pits at £28 per tonne, and we must make a judgment about the other 20 pits that are producing coal at £89 per tonne.

Mr. Dave Nellist: The hon. Gentleman is talking about investment in pits. A Minister in the Department of Energy told me after Christmas that approximately £100 million per year in interest charges is paid by the National Coal Board to banks on 22·5 million tonnes of coal stockpiled at pitheads. On "The Money Programme" shown on BBC2 last Sunday, NCB accountants estimated that the amount of money currently paid in interest on stockpiles of coal has doubled to £200 million per year. Would the hon. Gentleman not accept that a good chunk of what he claims to be investment is in fact stockpiling of coal to be used as a political weapon against the miners when they come out to fight against redundancies?

Mr. Lester: The corollary of the hon. Gentleman's remarks is that we should stop stockpiling coal, cut back production and close more pits, which is not acceptable to any Conservative Member. The analysed figures of investment in terms of machinery, new faces and new pits are separate from coal-stocking.
In our efforts to increase exports wherever possible at reasonable prices, we now export double what we import, and we import only specialised coals, so there is no prospect for more jobs in cancelling imports. What we need is more exports. Other countries are beginning to look for coal supplies, and we ought to be in the field with competitive, long-term prices, so that we can supply that coal.
Given those facts, a cool head and clear thinking—and I have lived in Nottinghamshire all my life, and have represented miners since I have been a Member—I am prepared to trust the judgment of miners to weigh up the facts, and to give them the chance in a ballot to make an accurate decision about the future of their industry. My regret is that they are not able to do that at present. From talking to the miners in my area about what the NUM is doing for them, I know that what they want is negotiations about shift payments which they find have not been adjusted. A shift payment currently averages £4 for very unsocial hours. The miners want negotiations about adjustments in pay, rather than the current political situation that they face.
The orders show a continued interest in the industry, a continued understanding of the significant change that is taking place, and are a sensitive and civilised way of trying to deal with the situation within the parameters of what the Government are able to do.

Mr. Roy Mason: I wish to follow up the remarks of my right hon. Friend the Member for Salford, East (Mr. Orme) and unreservedly welcome the increased pensions order and the redundancy and concessionary coal orders. Of course, they could have been laid at a different time and in better circumstances. Many pit men will think that they are being paid off at a time of industrial strife in the coalfields.
I welcome the increased redundancy payments. They are only what a miner deserves if his coalmine is likely to be exhausted and he is to be thrown on to the industrial scrapheap for the remainder of his life. Men of 50 to 55 years of age who have worked underground for 40 years will have dust on their lungs when they leave and will probably have been injured two or three times while underground. They will not necessarily live until they are 65.
The orders are related to the pit closure programme. At present, two grievances give rise to the coalfield crises —the 5·2 per cent. wage offer and the insistence of the NCB on an advanced rate of pit closures. Those sparked off the overtime ban. Only one third of the work force has been adversely affected by that. By far the majority of those in the industry do not work overtime. Many people recognise that there is a degree of immorality in constantly working overtime when there are 3 million to 4 million people on the dole.
The overtime ban had a number of objectives—to save the pits, to pay a decent wage and to employ more people. That ban was maintained for 17 or 18 weeks. Then, like a shot out of the blue, came the Cortonwood announcement. Cortonwood colliery was given five weeks' notice to close. That was the flash point. The NCB must now realise that it was a fool to create such an explosive position.
The men at the pit had been told that it had four to five years' life remaining with good quality coal and no immediate exhaustion. The branch officials and the men were shocked by the closure announcement. The matter was raised at the Yorkshire miners council meeting. It was a tense and angry meeting — I was present and I witnessed the mood. By a massive majority, the miners decided to stand by their previous ballot decision in favour

of industrial action against pit closures, other than those because of exhaustion or because their geological position made them difficult or dangerous to mine.
Why has all this come about? The chairman of the NCB, Mr. MacGregor, called for a cut of 4 million tonnes of coalmining capacity this year. Area directors were given discretion in cutting their quota of the 4 million tonnes. Instead of examining how best that could be achieved while maintaining good industrial relations and good coal production—perhaps by reducing face capacity in a number of the pits causing geological problems, or on odd seams with constant water problems—the NCB decided foolishly and impulsively to close one pit. It was a clean and clinical but cruel operation. It decided not to close a face here or there, but a pit that had four or five years of life with good quality coal. Indeed, miners had been drafted to that pit in recent weeks.
That was asking for trouble. Only five weeks' notice was given, leaving no time for pit closure review procedures. They were bounced. There was no time for local and national discussions or for appeals. Why did that happen? It was because after 17 weeks of the overtime ban, the NCB had lost 6·5 million tonnes of coal production—6·5 million tonnes of potential sales. Even at £50 a tonne, that equals £325 million. So the overtime ban was biting, and the pit closure programme had to be speeded up. It was a case of closing uneconomic mines faster to save money.
So there has been a county-by-county escalation of the strike. Of course, it has not affected every county. The National Union of Mineworkers has to face reality. The work force is different now. Now only 18,000 men in British coalfields are over 55 years old. The work force is much younger. Moreover, it is accustomed to a higher standard of living. It, therefore, has more commitments. There is a greater reluctance to lose wages and there is a hesitancy to strike. Not all mineworkers will see the reasoning of their leaders, but they must see the necessity of doing their utmost to save their pits, their jobs and their industry. In the event of a Middle East crisis, or the exhaustion of North sea reserves, or an expansion in our economy, a pit that is lost or closed now is another pit that is lost for good. Every pit with workable reserves that is closed means that we are sealing off our indigenous fuel.
We have had ham-handed leadership from the National Coal Board. It panicked and rashly decided, quickly and cruelly, to cut out 4 million tonnes of deep-mined coal capacity, irrespective of the conflict in the coalfields, irrespective of confrontation between management and men, and irrespective of the known hardship and suffering that it would cause in many mining communities. Although some miners may get decent compensation as a result of the new redundancy scheme, there will be more jobless, and many will soon be living off the state. Many hundreds of others in the mining areas affected with get nothing. They will suffer with the death of the pit, as will those in allied mining manufacturing, and local traders and businessmen.
Many will say that the miners cannot win this dispute. I say that the National Coal Board cannot win either, and its losses will be substantial. It is therefore time for the Government to intervene. It is time for the Government to propose less damaging alternatives. Why do we not cut the 4·5 million tonnes of coal imports pouring into the country? Opencast coal is piling up at power stations,


amassing coal mountains. If high stocks lessen demand, why not curtail opencast coalmining? We can bring supply into line with demand in a more understanding fashion.
If the Government were to advise the National Coal Board to take that course, it would quickly allay fears, lessen the tensions and create an atmosphere for the revival—it will take some time—of better industrial relations in the pits. That is not an extreme or drastic action to take. It is just common sense. It is common sense to avert a growing major industrial crisis.
I hope that the Minister will heed my words. I hope that he will pass them on to the chairman of the board, and insist that the board takes a less damaging course before our industry is in ruins.

Mr. Alistair Burt: Taking the hint from my hon. Friend the Minister in opening the debate, I should like to widen the debate.
I represent an industrial constituency where the major industry was paper, which has been hard hit by energy prices over recent years. During the past few months, many hon. Members will have received letters from their constituents complaining about energy prices. The cost of fuel affects both the industrial and domestic sectors, and scarcely anyone is untouched by worry about energy.
Accordingly, interest in this debate should be widely spread, and not confined to those hon. Members whose constituencies have substantial coal interests. Whatever this House decides for the coal industry in terms of grant and subsidy is directly related to the price of electricity, which eventually will be paid for by both domestic and industrial consumers.
The widespread concern about energy costs was highlighted last week in the debate about fuel poverty. The Government rightly received a sharp reprimand from the Select Committee investigating the rise in the cost of electricity—although not, of course, a reprimand about the rise in gas prices, demanded by the gas industry. The last thing electricity needed was a price rise at the behest of the Treasury. There are quite enough costs inherent in the production of electricity and it cannot be denied that the costs of coal in varied ways, including the cost of investment, extraction, wages, redundancies and pensions, are closely tied to the cost of electricity.
The vast majority of Britain's electricity is still supplied through power stations running on coal and the need to have an efficient and economic coal industry is as important to those outside the coalfields as it is to those employed in them.

Mr. Barron: Has the hon. Gentleman red Coopers and Lybrand's report on the electricity supply industry—it is in the Library—which recommends a reduction in the cost of electricity to industry and domestic consumers which the Government choose to ignore?

Mr. Burt: If we imported coal at prices some 25 per cent. cheaper than we now buy it for from the NCB, electricity prices could be reduced by between 10 and 15 per cent. World conditions mean that we could import coal more cheaply than we can produce it, which would consequently reduce the price of electricity for everyone. Those who tend to make Government the villain of the

piece in matters relating to the coal industry sometimes forget the measures of protection, support and investment afforded by the Government to that industry.
Two central arguments may be raised against the orders before us tonight. First, there have been those who maintain that the orders are not sufficiently generous and that support here as well as generally for the industry is not generous enough. Such a contention cannot be justified by the facts.
Reference has already been made to the projections made in the "Plan for Coal" in 1974. When considering the progress made under that report, it is completely unfair to accuse the Government of failing to perform their part in the plan. Under the investment provisions of that plan, at today's prices we might have expected investment from the Government of about £6,500 million. In fact there has been investment of over £7,150 million. The capital investment demanded by the plan has been more than satisfied. Moreover, the bulk of investment over the past 10 years has been supplied by a Conservative Government. The recent announcement referred to by my hon. Friend the Minister of the development at Asfordby, which will bring jobs and increase coal production for the midlands, was the largest major development to be announced since the previous Conservative Government's decision on Selby in 1970. There are few grounds for believing that the Government's record on capital investment is anything less than excellent.
Of course, pit closures were considered under the "Plan for Coal"—

Mr. Alexander Eadie: I am sure that the hon. Gentleman does not want to mislead the House. It was not the Conservative Government who provided for the sinking of Selby, it was the previous Labour Government.

Mr. Burt: The decision on Selby was made, as far as I am aware, by a Conservative Government.
The pit closures referred to by the right hon. Member for Barnsley, Central (Mr. Mason) were considered under "Plan for Coal" and it is pit closures which bring us to the Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order that we are discussing tonight. There is little use Labour Members banging the drum over pit closures with the problems that they bring for communities. There is no dispute among Conservative Members about the agony and distress caused by the closure of pits. In recent years hon. Members have become all too familiar with the problems of the loss of jobs and redundancy in a changing world. The Government did not invent the economic facts of life that say of any product that if it cannot be sold at a price acceptable to the market or if it is no longer demanded by the market production must inevitably decline or cease. Behind the despair and upset must be not the negative decision to retain antique work or production methods, but the positive decision to move into new industries and new technology.
The hand wringing and negative attitude of Labour Members, particularly the right hon. Member for Salford, East (Mr. Orme), would ring more true with us if their record on pit closures was not so stark and revealing. If one wants to close a pit, elect a Labour Government. No ring-side seats for Labour's active involvement in pit closures. The rate of closures since the war under Labour


has been greater than the rate under Conservative Governments. It is about time, therefore, that the hand wringing stopped.
The keeping open of uneconomic pits sabotages the coal industry and ultimately destroys jobs because it makes the industry less viable and puts at risk the industry's considerable future. Short-term negative attitudes can lead only to long-term despair. There can be no argument, therefore, that the Government are not being generous to the coal industry. There is no argument on investment, on miners' wages or in respect of commitment by the Government, as demonstrated by their support for new ventures in the industry.
Before considering the terms of the orders, it is worth looking into the second major argument against them, which is that the Government are too generous to the industry. Again, short-term attitudes directed solely to the current price of coal and to the consideration that imported coal might be cheaper in the short run, ignore the long-term effects of a rundown in the industry.
A decade ago, the energy crisis was on everybody's mind. There have been tremendous changes in energy consumption in western Europe in the last decade, forced by the energy crisis. Coal production, in common with other energy sources, has suffered from the world recession. Conservation measures have produced the effect in Europe of a decoupling of economic growth and energy consumption in that whereas between 1973 and 1982, GDP in the European Community rose by 9 per cent., energy consumption fell by a commensurate amount.
However, that will not continue for long, and with economic growth continuing, the energy demand will grow. We are only too well aware that our present major sources of fuel are finite and that some are coming to an end more quickly than others. But again, coal reserves are considerable and despite the present drop in the market, the demand for coal is likely to grow.
In giving evidence to the House of Lords Select Committee on the European Community coal policy, Mr. Karl Heinz Reichert, head of the coal directorate of the European Commission, noted that although European demand would rise by the year 2000 to about 500 million tonnes, the domestic level of production in the Community was likely to stay the same but that there would be a greater reliance on imports. Imports are necessary because, as Mr. Reichert noted:
the coal industry of the Community was not successful or was unable to fight its competitors.
So much for those who would like to see European-style subsidies brought into the coal industry here. The Community has been unable to compete with the more easily extractable coal imported into the Community.
The Select Committee reported that the proportion of Community coal consumed in 1982, at 70 per cent., was much less than that consumed in 1973, at 90 per cent. The inherent sickness of the European coal industry was summed up in the sentence:
production costs, inflated by keeping open quite uneconomic pits, have been too high for effective competition, despite subsidies paid by Community Governments to their coal industries.
Will the European coal industry be able to fight off the demand and pressure of imports? The role of the British coal industry can be clearly made out. It could advance and prosper so long as it makes itself more economic by

shedding the uneconomic pits that at present are raising the domestic price of coal to a value that makes it unsellable in the Community.
Those who argue that the coal industry has no future and who believe that it is pointless being generous towards it should think again. There is a European market for coal and it will grow as other energy sources dwindle But it is not an automatic market. If coal is to be sold in the Community, it must sell at a good price, at a price that can be achieved only by following the rationalisation process instituted by the chairman of the National Coal Board.
If that is done, and if investment is there from Government, there will be a coal industry of which the country can be proud and which will bring the nation great benefit in the future. What matters in energy is the long term, and to criticise the Government for their generosity now, and run the risk of ruining the coal industry for the future, must be unacceptable.
The success of the previous redundancy payments scheme was obvious from the number of people who wished to take it up and saw benefits in its generous terms. That is one of the reasons behind the increase in the past year in the numbers taking redudancy from an expected 10,500 to almost 20,000. The scheme's success was evidenced also by the not inconsiderable feat, until recently, of the painless and quite reasonable way in which the manpower reductions were achieved. No miners have been made compulsorily redundant. Surely, it is right to reward with generous terms those who have given a lifetime of service to the industry to enable them, should they wish, to employ the skills they have picked up over the years in new and different ventures. It is right also to reward those who have given a lifetime of service to the industry with a chance of secure retirement.
A social consideration must be taken into account in considering the effect of closures and redundancies on mining communities, and that is what the scheme does. Accordingly, in view of the changes in the pits and the composition of manpower in the mining industry, it is now necessary to safeguard and promote the considerable future that coal may have by offering these terms. It is important for the Government to be seen to offer these generous terms now to reduce the risk of compulsory redundancies in the future. The industry has a good record in that regard, and the terms offered in the order cannot be seen as other than generous.
Especially welcome are the extensions announced about the breaks in service, which reflect the Government's good faith towards the industry. I well remember the debates on these points in Committee on the Coal Industry Bill last autumn.
The present scheme's success has been evidenced in the facts of no compulsory redundancies and the number of miners taking advantage and making use of the scheme's terms. The new scheme will, no doubt, be taken up with equal readiness. In extending the scheme to a lower age group, the Government are only sensibly taking note of the current trends in the industry and the fact that, as closures continue, younger men are involved in them. A generous, understanding and sympathetic scheme is surely in the long-term interests of the mining industry.
It is clear that the coal industry faces a difficult time. Assailed by those who claim we spend too much and by those who claim we spend too little, the Government must steer a middle course, bearing in mind not only the important role that coal may need to play in the future but


the necessity of securing that future by taking the right measures now for the good of the industry in the long term. Those worried by energy prices and fuel costs for the old should look at the state of the coal industry and consider the effect on those fuel prices of an efficient and well-run coal industry.
Those who demand a larger slice of the market for coal in the future, both domestically and in the European Community, had better wake up to the fact that the rest of the world does not owe the British coal industry a living, and that only by putting its house in order will the coal industry have a chance to survive in the future and to provide any benefits to those who work in it and those who rely upon it for their energy.
Those who say that the coal industry has no future had better take heed of the continuing energy crisis and the difficulties the world is experiencing in providing safely and satisfactorily the new fuels for the future. It is necessary for a prudent country to continue to rely on a diversity of fuel supplies.
The orders are clear evidence of the Government's understanding of, sympathy for and generosity towards the mining industry. The Government have proved their commitment to the industry in the past, they are proving their commitment now, and they have demonstrated at Asfordby their commitment for the future. The world energy position proves the need for a vibrant, economic and efficient coal industry. The country, through its economic regrowth and regeneration, will prove the need for a continuing demand for coal supplies and energy. It remains only for some of those in the coal mining industry to prove to others that they recognise the need for change to be part of a future in which everyone wants them to share.

Mr. Alexander Eadie: I am grateful to the hon. Member for Bury, North (Mr. Burt) for, as we would say in the mining industry, he is good for toasting bread. It seems that he is trying to argue that the Conservative Government were responsible for the sinking of the Selby coalfield because it was the Secretary of State who made the announcement. It is rather strange that a Government can announce a sinking when they have not spent a penny on the project and when their spokesmen have not visited the site. I went to the Selby site. I went to Gascogne Wood and I discussed with mining engineers whether it would be possible to deal with potential water problems. It was my right hon. Friend the Member for Barnsley, Central (Mr. Mason) who cut the first sod at Selby. If the Secretary of State is to persist in the argument that he was responsible for sinking the Selby coalfield—

Mr. Michael Fallon: Does it matter?

Mr. Eadie: It does. It is very important. The Government cannot accept responsibility for Ashford, for Ashford is in the Vale of Belvoir. In fact, the Government reduced the Vale of Belvoir project by one third. There should have been three pits and the National Coal Board spent about £10 million or £11 million on a development plan on that basis. It was the Government who destroyed that concept, and that decision will have economic consequences in future. Let us put the lie to the mythology

that it was the Government who were responsible for sinking the Selby coalfield. Let us not try to deceive the people. Let us be factual and honest.
I think that the Minister will agree that he will be able to take the orders through the House without even breaking sweat. It would be foolish if the House were to say that the improvement financially will not be beneficial. We must welcome these measures, especially when we take account of the concessionary coal. The Minister has an easy task this evening. Of course, the contents of the orders do not constitute an announcement of new Government policy. The Government have aided the NCB in the propaganda war over the dispute in the mining industry and some of the terms of the orders were released to the press during one weekend.
Some of those who will be the subject of the orders will be confronted with early retirement and not merely reundancy. That being so, I think that the House will endorse the principle that we should treat them generously. I welcome the orders, but there is a reason for their introduction. We would be heartless if we did not say "Good luck" to those who are past the age of 50, who have worked in the industry since 14 or 15 and who are to collect redundancy payments. The expectancy of life in the mining industry can hardly be said to be normal.
The Government are introducing the orders in collaboration with the NCB and in conjunction with its policy, because they know that there will not be jobs for those who are engaged in the mining industry. The average age of those in the industry is 37 and the Government have introduced the orders because they have been told that the NCB's proposed pit closure plan will mean that 36-year-old and 37-year-old miners will be sent down the road. In many areas the job expectancy of miners will be practically nil for the rest of their lives. What a waste of resources. We shall be saying to people in their thirties, "We shall be rather generous with redundancy payments but your prospects of employment are nil." We shall be talking to those of 37 or more about early retirement and not redundancy payments. That is a scandal.
The Minister mentioned the sums involved. We should be foolish if we did not recognise that substantial sums are involved. If the money is available, the Government should be thinking about early retirement in the mining industry. No miner over 55 should be asked to continue working underground. I say that with feeling. Some of my relatives are working in the mining industry. At 58 or 59 years of age they still work in that industry.
We have a responsibility to examine the costs. We are in a debating chamber. We are entitled to ask how we can deal with costs. I have a number of suggestions to make. We can deal with costs and save taxpayers' money. The Government could intervene and bring an end to the industrial dispute in the mining industry. Whatever one says, the dispute will be costly for the ratepayer. The ratepayers will be involved in the cost of picketing.
Mr. McGregor deceived the Government. He deceived Parliament and the people. He and Ministers told us that a mining dispute would have little impact on the life of the country. I have experienced many industrial disputes. I was intimately involved in the 1972 and 1974 disputes. The present havoc is worse than it was in 1972. If I were a member of the Government, I should be concerned about that. The Government might be able to save money. They should intervene and bring an end to this industrial dispute.

Mr. Skeet: Will the hon. Gentleman give way?

Mr. Eadie: I shall make my speech in my own way. I shall not give way—[Interruption.] If I have the permission of the House, I shall try to argue my case fairly, in my own way.
I shall illustrate why the Government are incapable of intervening. I have shown how strength was miscalculated and how the Government and nation were deceived. Mr. MacGregor came to Scotland last weekend. On the radio he said that the problem was that the NCB had been too honest with the miners. That was an unfortunate remark. It would have been better if he had concentrated on Scotland, which has had six pit closures in the last 15 months. About 3,000 jobs have been lost. Two pit closures are the subject of inquiry. We have called for a further inquiry into the management and administration of the NCB in Scotland. Conciliation has been thrown out of the window. All that we have is confrontation. If it is the aim of the chairman, Mr. MacGregor, to pursue a police of confrontation, he will lead the Government to disaster, as well as the industry and the nation. The Government must intervene.
I shall give another example. Yesterday Mr. Edwards, the marketing director made a statement on the radio. He was challenged about domestic coal. He said that there was no problem, and that people must realise that winter is ending and we shall soon be into summer. It may be all right for a Hobart house bureaucrat to say that when he is enjoying the climate surrounding Hobart house. However, if he goes further north, he will discover that we get snow in Scotland in May and even in June. What a foolish statement for anyone to make. He tried to redress it. In the evening he was on television, saying that South African coal was being burnt at the NUM headquarters in Sheffield. That gives me a clue to how we could save money for the taxpayer.

Mr. Richard Hickmet: Is that true?

Mr. Eadie: I hope that hon. Members will bear with me for a moment. As I continue with my speech, perhaps the hon. Gentleman will understand why that could be true, if he is prepared to listen instead of barking.
I understand that the hon. Member for Berwick-upon-Tweed (Mr. Beith) is a good European. I tell him that 73 per cent. of South African coal is exported to the EEC. Most of it lands at Rotterdam. We import 4 million tonnes of coal. Much of it comes from Rotterdam. One never knows whether it is Polish, American or South African coal. It is possible that the coal at Sheffield was South African.
If we had one quarter of the export market in Britain, we would be able to provide 10,000 more mining jobs. That would benefit us financially by £175 million. Therefore, where is the problem of getting rid of the surplus demand of 4 million tonnes, as Mr. MacGregor tells us?
There is another good reason for not importing South African coal. No Government should be associated with South Africa and its policies. How do the South Africans mine coal?

Mr. David Ashby: Very well.

Mr. Eadie: I have discussed with mining engineers how the coal is mined. The labour force is taken from the

tribes. The first thing that they have to do is learn a common language. Whoever can survive that goes on to the next stage.

Mr. Hickmet: On a point of order, Mr. Deputy Speaker. What have the mining conditions in South Africa and methods of extraction to do with the orders?

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. Coal imports are within the scope of the debate. Interruptions prolong speeches, and many hon. Members, with good reason, want to catch my eye.

Mr. Eadie: I was explaining how the labour force mining coal in South Africa was trained. I explained that it was gathered from the tribes, who all speak different languages. The first thing that the mining companies have to do is to teach them a common language. It is no joke, by the way. If they pass that, they go on to the next stage, which is shovelling coal to the beat of a gong. If they pass that and are physically strong enough, they go on to the next stage, which is working coal in simulated conditions of the tremendous heat underground. We should not treat dogs in that way. They are allowed to work in the industry only for two or three years. After that time they are sent back to their tribes, probably with their health ruined. That is what happens under apartheid. We should not support the importation of coal from South Africa, either into this country or into the EEC.
My final suggestion would save money, and I hope that—perhaps after the dispute is over—the Government will consider it seriously. The system of conciliation procedures in relation to pit closures has manifestly collapsed. One is entitled under the conciliation and consultation procedure to have a meeting or an inquiry to decide whether a pit should be closed, but one does not go to an independent body—one goes to Hobart house. Hobart house acts as the judge and the executioner, and makes the decision. Is that in the interests of industrial justice?
In the past the system may have worked well, but one of Mr. MacGregor's great contributions since he became chairman has been to destroy it. The procedure needs to be reconsidered. No body, private or public, should be allowed to act as judge and executioner to decide whether one of its undertakings should close or remain open.
I hope that, despite the laughter and the guffaws from Conservative Members, it will be recognised that this is a serious debate. The consequences for the nation could be very serious. I hope that, even if nothing else emerges from the debate, the Government will take heed of what is said by my hon. Friends. I hope that they will embark on negotiations with the National Union of Mineworkers and put at the top of the agenda the need for a policy of conciliation rather than confrontation. If they do so, we shall have a successful industry which will benefit both the miners and the nation.

Mr. Richard Alexander: In deference to your wishes, Mr. Deputy Speaker, and to the hon. Members who still wish to speak, I shall be brief.
It is just 20 days since the House debated and approved a Supplementary Estimate for the coal industry in the sum of £289 million. Tonight we are increasing the pension provision, and the concessionary coal arrangements for pensioners. The coal industry has had a very good deal


from the Conservative Government in their stewardship of energy since 1979. We are now investing £800 million a year in the industry, or £2 million a day, or £60 a week for every man in the industry. Yet the orders are being debated against a background of unrest in the industry such as we have not seen for 10 years or so. It is being stirred up in some quarters as a crusade against the Government, but most miners realise that strike action is against both their present and their future interests.
I listened with interest to the comments of the hon. Member for Midlothian (Mr. Eadie). According to him, the whole problem is the fault of Mr. MacGregor and of my right hon. Friend. He totally refused to use the word "ballot". That word has not been uttered today by any hon. Gentleman on the Labour Benches. The scandal is that the leadership of the NUM will not allow its members to have a say in their industrial future. Who, in the country and parliament, speaks for the coal miner who wants a ballot and to work? They are not to be found on Opposition Benches. It is Conservative Members with mining constituencies who speak up for the right to work. This side of the Chamber is the bastion of democracy in the coal industry.
The orders reinforce the fact that Conservative Government since 1979 has been good for the mining industry. It has been good on pay, on redundancies and on investment. Conservative Government is good in all of the terms which are of interest to the miner. The Government have given a good deal. Moreover, the Conservative Government are good about ensuring a man's right to work if he wishes to do so. It is the Opposition who have the poor record on closing pits and redundancies and it is they who are representative of the undemocratic element in the coal industry, which does not want the present dispute put to the vote. The mining industry will continue to thrive under a Conservative Government.

Mr. A. J. Beith: I welcome the redundancy payments order. When it was first announced it met criticism from two quite different quarters. One comprised those who said—they included people in the NUM and, I suspect, in the Labour party—that it was a process of selling jobs. I heard that criticism levelled against people who have accepted provision under the scheme. As has been said, that is an unfair way in which to speak of people in the industry who are fully entitled to take advantage of such schemes, which I believe are an essential part of the modernisation and change that must occur. I understand the resentment felt by people who have been criticised in that way. Some of my constituents have been criticised by their union or others for accepting provisions to which they are fully entitled after long years of service in the industry.
The second area of criticism came from people outside the industry who asked why they could not have a similarly generous provision. That feeling is strong in other industries and especially in other parts of the coal industry. My constituents often tell me of people who work in the opencast section of the coal industry which works on an area and then moves on to another. Consequently there are many job losses and redundancies in it. People in that section of the industry are envious of their deep-mining colleagues who get the benefit of schemes such as we are

discussing. Moreover, they examine them and realise that chauffeurs, commissionaires, canteen manageresses and many others are included in the miners' scheme. I understand why but that leads to criticism in almost identical industries.
Despite those criticisms, I believe that the scheme is necessary. However, the necessary process of modernisation is not going at all well and to say that the industry is thriving is to be far from the truth. These orders should be part of a positive programme to put the industry on its feet but, for a variety of reasons, they do not look like that.
Serious mistakes have been made by several of the parties involved in trying to put the industry right. There has been a serious mishandling of the situation by the NCB in the accelerated closure programme and in the handling of certain closures. Many hon. Members have had experience of the properly conducted process. When a closure has to be considered because of the nature of reserves at a pit, consultations take place and there is a full review. In a number of recent instances, that has not happened.
Some serious mistakes have been made by the Government. One was the appointment of Mr. MacGregor as chairman of the board. There was no way in which he could win the confidence of the industry, given his age and reputation. That appointment was a mistake. The Government also persist in undermining confidence in the future of the industry by threatening the areas where the future is most at risk with the expansion of nuclear power. In my constituency, the Government threaten to put a nuclear power station next to a coalfield and a coal-fired power station. The decision at Sizewell to allow the nuclear industry to go ahead with some purchasing before the inquiry has been completed further inflames the fears of those in the mining industry.
The NUM's leadership has manifestly made some profound mistakes. I cannot imagine what good the present dispute is supposed to be doing to future prospects or confidence in the industry. The television pictures that we have seen have done immeasurable harm to the industry and caused deep anxiety and embarrassment to many miners.
A trade union with a democratic constitution and tradition is being subverted from the top by people who do not want the dispute to go to a ballot. I have heard it argued in the House that there would be a majority in favour of a strike, but the leadership will not allow a ballot to take place.

Mr. Nellist: Is the hon. Gentleman aware that in Yorkshire, for example, they have had ballots and 86 per cent. have favoured industrial action if pits are threatened with closure?

Mr. Beith: It is obvious that in some areas the men would vote for a strike, but that does not give them the right to go to other areas and physically stop people going to work and prevent them from having a ballot. An opportunity to vote should be available for every miner in the coal industry—just as the constitution of the NUM provides. If there is to be a national strike, there must be a national ballot and a 55 per cent. majority is required. Those provisions have not been exercised and the leaders of the union do not want to exercise them because they are frightened that they will not win the ballot. They are frightened of exercising democracy in the industry. They


are giving that industry a bad name and many miners deeply resent what is happening. They can see how much harm it is doing to the industry. The mistakes made in those three quarters are doing nothing to promote the good of the industry or to ensure that modernisation takes place.
Some Labour Members seem to imply that if a Labour Government were in power, not a single pit would be closed. The record shows that that has never been the case. We must face reality. There will be closures and there must be expansion in areas where reserves can be won economically. We want to see a commitment to do that, but the prospects for that are being undermined by the mistakes that are being made and we shall pay for them in the future.

Mr. Richard Ottaway: I do not have great experience of energy matters and I am not an expert on the coal industry, but I represent people in Nottingham who are affected by the issues that we are debating and by the crisis in the coal mining industry.
Like other hon. Members, I welcome the orders, but they must be considered in the context of a decline in coal mining since 1947. At that time, there were 1,000 pits and now we have fewer than 200. There is no doubt that we are in a crisis. For how long can we go on subsidising the coal industry as we have been? We have been putting in £2·75 million a day, but the finances of the coal industry are in a serious state. The old, uneconomic pits are draining away all the industry's lifeblood. There are about 38 pits open in Warwickshire, Leicestershire and Nottinghamshire, but they are producing 25 per cent. of the nations coal. That shows as well as anything which are the inefficient and which are the efficient pits.
The main issue being discussed tonight is redundancy. The industry has sustained heavy losses. It is clear that it is worthwhile to increase the redundancy payments for workers who have spent their lives down pits. For those hon. Members who believe that the redundancy payments are too high, I point out tht if we do not have them, we shall go on paying out £2·75 million a day until the cows come home.
The timing of this is good. One of the factors that has not been noticed when we consider the recovery and the levels of unemployment is the number of people who are leaving the job register every month to go into employment. Between 1968 and 1979, the number dropped from 420,000 a month to 380,000. That was the recipe for economic paralysis that we were facing in 1979. Now the figure is up to over 460,000 a month, so if people are having to take redundancy payments they will have the money behind them, and now is as good a time as any to make a move.
There is a pay offer of 5·2 per cent. on the table. It was not accepted by the leadership of the NUM, without a ballot, and there was then an overtime ban, which has lost the miners nearly £1,000 each to date. In Nottingham, the men were dismayed that a strike over pit closures was then called without a ballot. I am pleased that in the ballot that was held in Nottinghamshire the result was not to strike. That shows the good sense of the people who live in Nottingham. That decision in understandable. We are facing a world surplus of coal, and what is the point in producing coal at £89 a tonne from inefficient pits? We have to fight in this world—we are in an economic war.

To carry on with such subsidies for coal does not make sense. This is an attempt to make the coal industry profitable.
People both inside the House and outside have criticised the policing of the picket lines in Nottinghamshire. They say that the police are being too hard. I and the people of Nottinghamshire are grateful for that police activity. The only thing that the critics can say is that the police are being too hard, but that is one-sided criticism. All that the police are doing is the job that they have been asked to do. I remind the Yorkshire miners that by coming to Nottinghamshire they are in contempt of court, and their activities are unlawful. Instead of criticising the police, the critics should look to the NUM leadership. My constituents who work down the pits want a national ballot. The NUM should be giving everybody a say.
The coal industry faces a number of challenges. The Conservative party has shown that it has a clear commitment to the future of the industry. As my hon. Friend the Member for Newark (Mr. Alexander) said, the money that is being invested is a clear sign of our commitment. There must be increased production and demand.

Mr. Nellist: That is why the pits are being closed.

Mr. Ottaway: If Opposition Members want to see increased production, they should look at Japan which is having a recovery from the world recession, with demand up by approximately 5 per cent. We want to see exports up, and imports down.
If we carry on behaving in the way that we are now, our customers will lose confidence. Regular established customers outside the country and in the country will lose confidence in the coal industry. The introduction of measures such as these orders will stabilise the situation so that we can put the coal industry on an even keel.

12 midnight

Mr. Dennis Skinner: The hon. member for Nottingham, North (Mr. Ottaway) raised the question of the police. I have had a telphone call from one of my constituents whose husband has been locked up in Derby police station for 12 hours. That woman was in tears. Her husband has done nothing wrong, except to take part in peaceful picketing. Similar examples can be cited from the Labour Benches again and again, and I hope that they will be.
The orders are all about sacking more miners. The Government can dress them up in any language they like, but the orders are about sacking more miners. This is all part of the "rule of fear" philosphy of the Government, to make sure that more and more people are added to the dole queue so that there are enough people outside fighting for the jobs of those who manage to hang on. The Tory Government have carried out that philosophy from day one.
The man who ought to be getting the sack, apart from all hon. Gentlemen on the Tory Front Bench, is MacGregor. Not only has he smashed the coal industry, he has smashed the steel industry, and he left the Amax in America in one hell of a mess. In March 1982, according to the Financial Times, MacGregor left Amax with a deficit of $390 million, and, according to most informed opinion, he has appointed all the people who were involved in bringing about that deficit. This


Government are allowing MacGregor to butcher the coal mining industry when it is known very well that his record is one of dealing with nothing but the short term.
I do not welcome the orders. As my hon. Friend the Member for Midlothian (Mr. Eadie) said, we know that they are all wrapped up with the objective of throwing miners on to the scrapheap. This is what the Government have done in countless industries throughout a five-year period—steel, boot and shoe, textiles, and engineering, in the so-called prosperous midlands. The Government did it with flexible rostering in the railways, which was supposed to produce a more flexible rostering in the railway system, but look what happened. It ended up costing them even more money.
The NGA was another example where the Government joined with Eddie Shah to throw people out of work. Eddie Shah had a job at Granada Television, he got mixed up in a little bit of chicanery, and then he disappeared under a cloud. I am told that he was using the television cameras to look after some of his friends, and that is another story that should have come out at the time. But the police and the Tory Government were not hounding Eddie Shah about breaking the law. The Government are using the police to hound the picketing miners on strike in the coalfields, a majority of whom have been on strike from day one. As for all the talk about the minority, the minority has been at work since the very first day that the Yorkshire coalfield came out on strike. There has been a majority of pits on strike from day one. Those people who continually call for a national ballot are making the preposterous suggestion that the minority should tell the majority what they must do.

Mr. Hickmet: When will there be a ballot?

Mr. Skinner: There will be a ballot when the Tory party chairman faces a ballot for the job that got him an extra £5,000. We will have a ballot when the Tories start practising a little bit of democracy. That is when there will be a ballot, and not until then.
Then there is the question of the closures. Not only will the orders add to the amount of money that the taxpayer has to contribute, but it has already been calculated that the 70,000 redundancies over a period of 10 years will cost the taxpayer £4,300 million. To keep those 70,000 people in jobs, the taxpayer could get away with paying only £2,000 million.
The Government argue in favour of shutting uneconomic pits. I do not know whether Tory Members understand, as my hon. Friends understand, that uneconomic pits vary from year to year. We could examine the records of uneconomic pits in Lancashire, Scotland, south Wales, Yorkshire and Nottinghamshire in one year only to find that in the following year they have moved from being in the red to being in the black. They might have found some decent strata. In many cases, the uneconomic pits that the Government want to close have extremely rosy prospects. My hon. Friends could cite countless examples of pits that have moved from the red to the black in a short time. [HON. MEMBERS: "Name them."] I can name some in my constituency — Shirebrook, Whitwell, Warsop, Arkwright and Renishaw. All those have been in the red but then come into the black.

Mr. Allen McKay: Does my hon. Friend realise that not a pit, but a whole coalfield in the Barnsley area, was once scheduled for closure? Next year it will make £21 million profit.

Mr. Skinner: That clearly exemplifies my point. Cortonwood has provided the flashpoint.
Tory Members have trotted out figures about which Government closed the most pits. Before I came to the House I marched against the Labour Government's plans to close pits. I remember the big rally in 1967 at Central Hall. I was in the coalfield before the Tories left office in 1964. About 300 pits were shut during the 13 wasted years of the Tory Government. Pits were closed in Durham and Scotland. Ten pits were closed around Clay Cross in five years. Almost every one was closed by a Tory Government. If Tory Members want to bandy about figures, they should go back before 1964 to do their calculations.
It is proposed to close pits that have had massive investment. At Polmaise, £15 million of taxpayers' money was spent—but then MacGregor came along with his short-term policy and all the money invested to produce good, economic coal has been wasted. He put the lid on it.
People ask what Britain will do when the oil runs out and gas begins to taper off. It is madness to close pits when, even on the most conservative estimate, there are 300 years of coal beneath the ground. Some believe that the figure is even greater. Oil will begin to run out completely after 1986–87, and North sea gas has reserves for only 14 years. Yet pits are to be closed. When a lid is put on a pit, in most cases the coal is sterilised. Some can be mined by the opencast method, but the machines used will not go down 3,000 feet whatever the technological developments.

Mr. Jack Thompson: There are coal reserves under the North sea that will be sterilised for the same reason.

Mr. Skinner: No opencast machines can get hold of that coal. We are talking about 4 sterilising reserves of which any western economy would be proud. Countless countries in the Common Market, in the east and in the west — including Japan — would like just half the reserves of Britain. Yet the Tory Government will sterilise those reserves for ever and a day. We shall be short of energy as a result.
I want to say a word about subsidies, because the Tory Government are always talking about how much support they give to the mining industry. Indeed, £366 million had to go in interest charges in 1982. That will be around £400 million in the 1983 figures, which are not yet out. There is £200 million for stocking coal. Is that going into the industry? It goes to the banks. They get their fair share.
Then there is the question of marginal pits. The Government believe that it is right and proper to provide £200 million in subsidies for hill farming. This was announced in a statement made here by the Minister of Agriculture. We all agree that hill farming is a sensible idea. Let us get as much produce as we can from our land. It saves on imports. I do not quibble about that. However, if one gives aid to marginal areas of land, one should do the same thing for pits that are only temporarily uneconomic and marginal.
The same is true of North sea oil. The Government introduced a Bill not long ago, which we did not oppose, to give tax relief to areas of uneconomic oil reserves. That made sense. It is right to give some incentive to those companies—they were private companies, although of course they should have been public companies — to develop the marginal reserves of oil. If the Government believe that that is right for oil and agriculture, and many other areas, why do they not believe that it is right for the mining industry? They are only interested in redundancy and introducing orders such as the one we are debating.

Mr. Nellist: Does my hon. Friend consider it fit—[HON. MEMBERS: "Get on with it."] If we had a bit more quiet on the Government Benches I could get on. [Interruption.] When the fifth form over there has quietened down, I will get going. Does my hon. Friend think that in closing what they call uneconomic pits and developing super pits, this Government are looking three or four years ahead, to completing a programme of privatisation and returning those large-scale pits to their mates in the energy business, as they are now doing with Britoil and the oil reserves?

Mr. Skinner: I have no doubt that they are harbouring such thoughts in their mind. What has happened in the past few weeks has shown that there are bodies of men in the mining industry who are not prepared to be trampled on in the way that the Government have trampled on the millions of people that they have thrown on their industrial scrapheap. I am proud of the fact—

Mr. Skeet: rose—

Mr. Skinner: No. The hon. Gentleman will only represent the oil companies. [HON. MEMBERS: "Vested interests."] I am proud of the fact that a majority of miners have decided to gird themselves to take on this Government and the butcher MacGregor.

Mr. Skeet: What about the ballot?

Mr. Skinner: I believe that the answer for the mining industry does not lie in passing orders. They affect only the margin. They only follow on the devastation caused by this Government, MacGregor and the rest of them who work on their behalf. [HON. MEMBERS: "Get on with it."] What the miners have to do now in every coalfield is to get together and have a united strike. Instead of reducing the amount of coal at Scunthorpe, we shall have a succession of victories during the next fortnight, and give the Government the same medicine that we gave them in 1972 and 1974.

Mrs. Edwina Currie: It is probably a minority view that the debate is not about the current dispute. All that I wish to say about that is that it is a tragedy for the industry, for the union, for all the people and their families who are suffering, many of whom are my constituents. They want a national ballot and on their behalf that is what I call for. If the right hon. Member for Barnsley, Central (Mr. Mason), who clearly is not on the night shift today, thinks that he will find a better target in opencast mining, which also goes on in my constituency, he had better think again.
The orders before us are about long-term manpower planning, exactly what some hon. Members are calling for. It is the most generous redundancy scheme anywhere

in the country and, I suspect, one of the most generous in the world. I welcome it. I also welcome the fact that the Secretary of State has not declared exactly how many people he thinks will benefit from it, thereby perhaps avoiding the mistake of his right hon. Friend the Secretary of State for Social Services in the National Health Service. I am somewhat anxious that if we do achieve 20,000 takers under this scheme, which is the sort of figure that the coal industry is looking for, and if they are mainly men under 50 years of age, which, because of the age pattern of the industry they will have to be, and if they do qualify for the average figure of around £20,000, we are talking about £400 million. That is a very large sum which will have to be borne by the Exchequer. Many Labour Members' constituents will benefit from it and they should be jolly grateful.
The industry must contract its output. Most of what we have heard tonight has been about the problems of an extractive industry, about the need to open new mines and close old ones. It goes further than that. We have been producing too much coal for a long time. It is not just that it is too expensive. We have far too much of it and there are a number of reasons why that should be so. One is that we are still closely geared to the days when Britain depended on heavy industry —steel, steel, shipbuilding and railways. That is no longer the case. That is the industrial philosophy of the 1920s which created the great union that we see today and in which, unfortunately, the political thinking of many Labour Members seems to be rooted. Those industries have gone substantially to the new industrial nations of the Third world. That move has been inevitable. It was bound to happen sooner or later. Our new industries are no longer heavy users of resources, particularly of fuel, in the way that the old industries were.
We are still also geared up to the days of the profligate use of energy. Many houses, schools, buildings, even this place, were built in the days when all fuel was cheap. The pattern of fuel price increases in recent years has led to a tremendous move to conserve fuel. That pattern car only continue. If it does, we shall continue to be producing too much coal, even at the levels, I suspect, to which the NCB is working.
Even if we were to continue to produce the same amount of coal, improved technology in the pits, of which the hon. Member for Rother Valley (Mr. Barron), who is a fairly recent arrival from the pits, will be aware, must mean that we shall require fewer people to produce the same amount of coal. The miner of today, as my constituents never fail to remind me, is not a pick and shovel man, he is a highly skilled engineer, used to working fast in difficult and dangerous situations, handling computer controls and highly sophisticated equipment, and he is used to taking coal at breathtaking speed.
It was most interesting recently to be standing upright in a 10 ft high seam on a long wall mine watching £5 million of equipment taking 1,000 tonnes of coal a shift. Labour Members will have had similar experiences. More than 60 tonnes per man shift can be taken from long wall mining from walls over 600 ft long in midland coalfields. The miner who does that is doing something that was impossible 10 years ago and would have been an impossible dream to his father. Therefore, whatever we do in this industry the changing pattern of technology will demand that long-term manpower planning has to come.
I also challenge the notion that the movement towards redundancy on the present lines is so unwelcome. Early retirement has led to the formation of a substantial number of retired miners' clubs, and there are a number of them in my constituency. The secretary of one such club told me at a function which was attended by more than 300 people, "Ten years ago a club such as this could not have existed. Ten years ago, a miner crawled out of the pits at the age of 65 and dropped dead, and his concessionary coal was claimed by his widow. That no longer happens because they can take early retirement; the terms are generous and we are glad of that. This club is thriving." Several thousand people in my constituency are eligible to join such clubs. For many of them it is a welcome release.
For younger men, too, the opportunities are often bright. In the 1960s, many mines in south Derbyshire closed. The unemployment rate in my constituency is 6·7 per cent. The miners are welcome workers in other industries, particularly in high technology light engineering. Employers have told me that they seek to employ miners because they are able, hard working, reliable, safety conscious and like working hard for good money. That makes them a highly attractive workforce.

Mr. Jack Thompson: Is the hon. Lady aware that the original idea of redundancy payments was fair and proper in that it was to compensate a person for losing his job and to cover the period between the loss of one job and the finding of the next? That may still be the case in her constituency, with an unemployment rate of 6·7 per cent. In my constituency, with 18 per cent. unemployment, when somebody is made redundant that is the end of the story because there are no other jobs. Miners who were made redundant in my area received their redundancy, but it is now running out. Their redundancy of, say, £20,000 represented two and a half to three years' pay, but it is going and they are in the dole queues. Their chances of getting another job in the area are nil.

Mrs. Currie: About 20 years ago — certainly in 1966, when the present Lord George-Brown represented most of my constituency and had a majority of 18,000 —the same things were being said, and they proved to be false.
My answer to the hon. Member for Wansbeck (Mr. Thompson) is that I have a suggestion which, I hope, will be taken up. Hon. Members in all parts of the House should bear in mind that when pits close, as they are bound to do, we should all be better engaged in advising our constituents on how best to use their redundancy money. The greatest tragedy would be if their £20,000 went on Japanese videos and overseas holidays, which is likely to happen.

Mr. Barron: Or foreign cars.

Mrs. Currie: Yes, or foreign cars.

Mr. Barron: What does the hon. Lady drive?

Mrs. Currie: Not only do I drive a Maestro, but I have a coal fire in my house, which is more than many Labour Members can say.
We would be better engaged in getting together, in those areas where there are difficulties, an advisory board composed of members of the local authorities, the NCB, local industry, the CBI and the banks, all of which have

good advice to offer. It would not need legislation, but the Government should take a lead and encourage such a move. In the south midlands area—I hope that other hon. Members will take this view—I would be willing to join hon. Members from both sides of the House in setting up such a group. I should like to see the £20,000 and £30,000 redundancy payments with which the miners will leave the pits being invested in the local area to provide a good strong, secure and diversified future for the neighbourhood.
The coal industry has a rosy future. As new mines develop and as old ones close, the price of coal will fall. Anything will sell if the price is right, and I believe that we shall become a net exporter rather than a net importer in years to come. That price change will, in my view, tip the scales against nuclear power. We shall win the argument against nuclear power, not just on environmental grounds—because coal makes a mess, too—but on cost grounds, which is more significant. The price of tha future is radical change in the present. A necessary prerequisite is acceptance of such change by the people in the industry. These orders will make that transition smoother and better for all involved.

Mr. Michael Welsh: I shall be brief because a number of other hon. Members wish to participate in the debate.
I do not welcome the orders, but accept them—and those points are quite different. I accept the orders because the Government are determined to close pits, whether or not the miners like it. The Conservative party has a majority in the House, so it can implement the orders.
The orders will mean that the lads from closed pits will receive a bob or two. I am not criticising that measure. I would prefer the young men on the pits to fight hard to keep the pits open so that they can work rather than be thrown on the scrap heap, as will happen, as sure as God made little apples, when the orders are accepted.
The hon. Members for Nottingham, North (Mr. Ottaway) and for Newark (Mr. Alexander) referred to the Government's large investment in the industry. I do not dispute that. To where can the NCB go for money? It can go only to the Government. Before the Conservatives came into office, the NCB obtained a large sum from the EEC. Immediately the Conservatives were elected to office, the Chancellor of the Exchequer wrote to the EEC saying "No more borrowing for the Coal Board because if it borrows from you those funds will be part of the public sector borrowing". The Government do not allow the NCB to borrow on the open market. It is all very well to say that the Government of the day loan money to the coal board, but as a nationalised body, the NCB can borrow only from the Government by an Order in Council. We should get the facts right. The coal board has dearly paid interest. At times the NCB could have borrowed the money more cheaply.
The hon. Member for Nottingham, North referred to the duties of the police in Nottinghamshire. On Thursday, I was on the picket line. With respect, Mr. Deputy Speaker —I shall not go into the matter at great length, as that would not be right, and I shall accept any comment you make—there is a shadow of doubt, to put it mildly, that the police are carrying out their duties as they should. A number of them are going to extremes. They are not from Yorkshire, but from other areas. Conservative Members


should be careful when saying that they agree with everything the police do. On Thursday morning, I was terribly embarrassed to see a policeman smash-a car and window with a crowbar.

Mr. Deputy Speaker: Order. The hon. Member must not persist with that matter, as he well knows.

Mr. Welsh: I am sorry, Mr. Deputy Speaker. I thought that that would be a fair comment to make after the speech of the hon. Member for Nottingham, North.
The aim of the order is basically to encourage miners to accept unemployment. They should not do so. Instead, they should try to change the NCB's mind so that pits are kept open. The miners should show the NCB and the Government that the actions of the NUM are in the national interest. It has been repeatedly proved that even the closure of uneconomic pits is against the national interest. From this year, British oil supplies will decrease so that in four years there will be about 25 per cent. less available. That is equivalent to 42 million tonnes of coal.
From where will the country get energy if the Government continue to close pits? If energy supplies are obtained from abroad, a tremendous amount of unemployment, embarrassment and an intolerable balance of payments situation will be created. There is, in effect, only one shaft in Britain, and it is made up from all the individual shafts, and if a pit is closed the shaft is narrowed. Once that happens, it is impossible to extract more coal, irrespective of demand. Our oil and gas reserves are being depleted, but almost any form of energy can be produced from coal. That production can take place only if we own the coal and mine it. If we fail to do so, the consequences for the United Kingdom will be dreadful. Those who want to close pits are not considering the long-term national interest. The closure policy is based merely on short-term profit.
All Governments since the second world war have made the mistake of not giving sufficient support to the mining industry. The industry never demanded the market price for coal. If it had done so, it could have invested without borrowing. It did not demand that price because it thought that it was correct to keep the cost of living as low as possible. Later Governments of both major parties closed pits and, to the nation's embarrassment, depended on cheap oil. Everyone was happy when cheap oil arrived and pits were closed. When someone turned off the tap and reduced the supply of oil, it was necessary to mine more coal. If we close more pits, we shall embarrass the nation in the years to come when other energy reserves are depleted.
The only Government who worshipped the mining industry, looked after it and realised what coal meant to the nation were the war-time Government led by Winston Churchill. He realised that coal was vital and he would not allow any miners to join the army. He appreciated the nation's great need for coal. By and large, his was the only Administration that understood the extent of the benefit that coal could bring to the nation.
The NUM is acting in the nation's long-term interest. When it is striking or taking other industrial action, it is doing so to ensure that our children have a source of energy that will enable them to survive. That is a good, sound policy. I say to all those who are assembled in the Chamber—it is a full House for this time of night—that those who have the country's interests at heart should

support the Yorkshire area of the NUM in its fight to keep pits open and to protect our future energy supplies. It is a policy that will bring great opportunities to Britain.

Mr. Francis Maude: I shall take up some of the issues raised by the right hon. Member for Barnsley, Central (Mr. Mason), who has unfortunately disappeared from the Chamber. The right hon. Gentleman talked about the need to close certain sectors of the coal mining industry. He directed himself especially to opencast mining. He appeared to argue that because opencast mining yields cheap coal it should be closed to enable Britain to continue to produce more expensive deep-mined coal. That is one of the most remarkable pieces of logic that I have ever heard and I am not surprised that he has not stayed to hear it debated.
The right hon. Gentleman referred also to imports and the need for us to reduce them to protect the expensive deep-mined coal that is produced at home. We have a net surplus of coal. We export nearly twice as much coal as we import. We import only specialist coals that we cannot produce in sufficient quantity or at anywhere near a price that is realistic. When we are digging out of the ground specialist coal at well over twice the price at which it can be bought elsewhere that makes no sense. To suggest that we should cut imports to do that is to resort to the economics of the madhouse.
I wish to refer to some aspects of the present dispute in the mining industry. My constituency contains the whole of the Warwickshire coalfield which is, by and large, profitable and has a moderate work force. It was given the chance to decide its destiny in the last month and it voted by five or six to one to stay at work. The workers have stayed at work, by and large, in the face of appalling pressure and intimidation. Pickets from other parts of the country, who have no interest in the future of Warwickshire pits, have been there most days. Workers have been subjected to threats of damage and injury to themselves and their families. Because of their toughness, commonsense and dedication to their industry they have, in large part, remained at work.
The hon. Member for Bolsover (Mr. Skinner), in what I assume to be a passionate speech, made no mention of the ballot taken in north Derbyshire. That is not particularly surprising since that ballot decided, as have almost all similar ballots, that the miners want to carry on working. He seeks, as do leaders of the NUM, to deny members the chance to decide their own destiny. He will not be able to complain when, in due course, the NUM tears itself apart.
It makes no sense to continue producing coal that nobody wants to buy because its production cost is too high. We and the Opposition have the same aim. We want the British coal industry to produce coal at such a price that it can compete overseas, so that once again Britain can become a major coal exporting country. We take a different route to achieve that. We want to develop the coal industry so that we produce coal at below the price at which it can be sold. In that way we can corapete genuinely in the world market. The Opposition want to bring prices down to such a level, not by extra competitiveness, but by milking the taxpayer. They are the same people who complain about increases in electricity prices. They do not recognise that the price of electricity could be reduced substantially if the price of coal were not


kept at such an uncompetitive level. The people who complain about the high price of electricity want the subsidies to be kept high and the expensive pits to be continued. That makes no sense at all.
The aim of all hon. Members with commonsense and a genuine commitment to the future of the coal industry should be to get the average price of coal down—not by milking the taxpayer, but by closing uneconomic pits and developing profitable areas.
The south Warwickshire coalfield is potentially profitable. It is the most profitable in the country. When that is developed we shall be able to reduce the average price of coal from British coalfields substantially. That will enable us to become, once again, a major coal exporter. I look forward to that day because my right hon. and hon. Friends have a genuine commitment to the coal industry based on realism, common sense and an understanding of the economic facts of life. It is those facts of life that Opposition Members have wilfully failed to recognise in the debate.
We are debating one part of the necessary machinery to reach that end. It will be a painful process, but it must be done. The sooner it is done, the better.

Mr. Allen McKay: I should like to take up one or two points made by the hon. Member for Warwickshire, North (Mr. Maude). He and other hon. Members mentioned that my right hon. Friend the Member for Barnsley, Central (Mr. Mason) was not here. They have forgotten that he was the Secretary of State for Northern Ireland, and there are always problems about security. He had certain commitments, otherwise he would have been here.
I almost closed a coalfield, principally because it was uneconomic. However, it survived, and will make a substantial profit next year. Therefore, when people talk about economics in the coal industry, they should be careful. They should consider the repercussions of a colliery closure not only on the village but on the businesses in the village, as the effect can be devastating. There is also an effect on the economies of local authorities, because the area's rateable value goes down vastly when a colliery is closed. That makes one see why collieries should be kept open.
Such arguments remind me of what my old industrial relations officer said when a certain person was making a botch of colliery closures. I closed 20 collieries on behalf of the board, so I know exactly what that means, and the heatbreak that it causes. Closures should not be dealt with in the way they have been recently. That has caused many problems.
My old industrial relations officer said to that person, "I understand you have two degrees, lad." He replied, "Yes." The officer said, "Hang 'em behind the door. You work for the coal industry now, and will not need them here." We need not economics but sheer common sense. That is one of the problems in the coal industry.
The unions are committed to policies for the 1980s for an efficient and expanding coal industry. They want to retain the work force, and they want there to be more capital investment. This is no time to use short-term measures for short-term market situations because

eventually one will find oneself without a coal or energy industry. We could import coal, with everything that entails, but that is not the right course.
I refer to a colliery in the constituency of my hon. Friend the Member for Wentworth (Mr. Hardy). Cortonwood is on th borders of my constituency, and is a sister pit to the one in which I spent 20 years of my life. Some 116 of my constituents went to that colliery on the understanding that they would have at least five to six years' work, and then would be made redundant. They did not want to go to that colliery in the first place. They told me that they would prefer to be at another colliery at any time. They preferred not to work there because of the conditions. They were given that promise, and were happy with it. However, five weeks later they were told that the colliery was to close.
What caused that decision to be made? I know the area director well. He would not have made such a decision. He promised to keep Elsecar colliery open for five or six years. He said that it made such a contribution to the prosperity of the NCB that it deserved that five or six years' life. However, the decision to close Cortonwood was a completely different type of decision, taken only five or six weeks after my constituents went there. Why was it made? It is no use having a colliery review procedure that has stood the test of time if a boss in the NCB instructs the area directors immediately to close collieries without going through that procedure. That is what happened to Cortonwood colliery and why we have the problem now. It did not go through the review procedure or even start the first stage of it. It was a case of immediate, effective closure. That is why the area directors are incensed. That is why the NUM and the mineworkers are incensed. They are fighting for the jobs. They see what is happening under Mr. MacGregor.
If ever an industry needed confidence, the coal industry needs it now, and there is no confidence in the chairman of the NCB. We know what happened to the steel industry. Mr. MacGregor is recognised as a butcher. The Government should not have put a butcher in that job. There were enough people in the management of the mining industry who could have used the "softly, softly" approach — as Norman Siddall recommended — in conjunction with the unions. We would have ended up with an efficient mining industry that paid its way. It would have taken longer, but not much longer. Now, a climate of industrial relations which took 20 years to build up has been destroyed in five weeks.
Irrespective of feelings and ideology, a time has to come when action stops and talking starts. There must be a change in the present battle, and the Government must swallow their pride and bring about that change. Now is the time to take a hand in what is happening in the coalfields. If the Government do not do so, they will end up with bad industrial relations and a bad industry—an industry that they never envisaged. The time has come to take action before it is too late and the Government must swallow their pride and do it.

Mr. Richard Hickmet: I have given an undertaking to speak for only five minutes, and I shall try to keep to it. However, it is only right that when these orders are being debated hon. Members should realise the effect that the Yorkshire mineworkers' action


is having in my constituency, which includes the Scunthorpe plant, one of the five major integrated steel plants in the country.
I remind hon. Members that since 1981 there have been 11,000 redundancies at that plant. In addition to that, many people whose work is dependent upon that industry have lost their jobs, without the benefits of the redundancy payments that the steel workers receive.
Currently employed at Appleby Frodingham and associated works there are 6,800 people whose jobs are on the line, courtesy of Mr. Arthur Scargill. That is disgraceful. The Appleby Frodingham steelworks in my constituency is working at half time. It will be able to continue working for perhaps two or three weeks. After that, people will be laid off and the works will no longer be producing steel.
Hon. Members should realise the consequences of that. In the past three or four years, the British Steel Corporation has been through a process of rationalisation. It has been increasing its productivity and its competitiveness. For Appleby Frodingham, all of that is now at risk. If Appleby Frodingham stops producing steel, no steelworks in the country is secure. The works will have to let down its customers. If coal does not get into the plants the coke ovens will be damaged, the blast furnaces will be damaged, and Scunthorpe will die. That is a shame.
Arthur Scargill is mucking about in the High Court pretending to be a QC when he should be calling the national ballot that the moderate members of his executive have demanded. I do not accept that that man should condemn the people of my constituency to unemployment when he does not have the guts to face his own mineworkers. The policy of Arthur Scargill is selfish and is condemning my constituents and mineworkers to a policy of division, which fails to recognise realities.
My constituents will not get anything like the redundancy payments that Arthur Scargill's Yorkshire miners will get. They will have no choice about being made redundant. We have heard that no miner who does not want to be made redundant will be made redundant. That is not the case in my constituency where 6,800 jobs are on the line. Is the right hon. Member for Salford, East (Mr. Orme) in favour of a ballot of the membership of the NUM or not?

Mr. Terry Patchett: I do not believe in wasting words and much of what I intended to say has been said. I never cease to be amazed by the apparent surprise of Conservative Members at circumstances in the industry. I believe that they have been designed and that these orders are part and parcel of that design. The pension scheme should be of the same quality as the redundancy payments scheme.
I question the origins of the scheme and the identity of its initiator. It is a useful weapon for Mr. MacGregor, with his plans to decimate the mining industry. I cannot help thinking that the scheme and much that is now happening were planned long ago. I cannot help thinking that these were the terms that were laid down by Macgregor in the protracted negotiations that took place before he took over the chairmanship of the National Coal Board to settle compensation for the firm that lost his services. I believe that the increase in redundancy payments was part of a careful Government plan to break the back of the NUM,

regardless of the nation's interests. The angling of the closure of Cortonwood that sparked off the present unrest was no accident.
I hope that the Government realise what a dangerous path they are treading. We might be getting close to a police state if my suspicions are right. If my fears are wrong, I challenge the Minister to tell us what was discussed at the negotiations on the employment of this man MacGregor. Were redundancy terms for miners a topic? To what extent is the Government's attitude anti-trade union and what will the Minister do? He must answer those questions as he must concede that it took quite a while to negotiate Mr. MacGregor's contract and the compensation for his American company. I refuse to accept that the talks concerned only Mr. MacGregor and his future. I believe that the quality of manager to be found in the British coalfields far exceeds that of Mr. MacGregor, but that his talents, which appeal to the Government, are more in line with their anti-trade union thinking.

Mr. Neil Hamilton (Tattoo): Yesterday, I went to the Library—the hon. Member for Bolsover (Mr. Skinner) will know where that is — and took down from the shelves a volume of the statutes of 1946 and opened it at the Coal Industry Nationalisation Act 1946. I do not know whether there is a copy of that Act in the library of the Department of Energy or in Hobart house, but I recommend my hon. Friend the Minister to look at it once again, especially section 1 (4), which says:
(4) The policy of the Board shall be directed to securing …

(c) that the revenues of the Board shall not be less than sufficient for meeting all their outgoings properly chargeable to revenue account…on an average of good and bad years."
The truth is that in 1981–82, far from balancing the books, the NCB lost £428 million, in 1982–83 it lost £485 million and this year it is set to lose a staggering £1·145 billion, all paid by the taxpayer. On top of that, we invest about £700 million or £800 million per annum.
What is the return on that investment? I tabled a question last year about investment in the coal industry and an interesting figure was revealed in the answer. The total capital stock of the NCB is £6·3 billion and the return is not the 8 per cent. that one would get from putting one's money in the bank or the Post Office. It is not even 5 per cent. It is minus 5·9 per cent. So not only is the NCB not balancing its books from year to year and producing a nil return on investment, but it is eating up the nation's capital year by year and impoverishing the rest of British industry.
The rest of British industry, which has to survive on its merits and not on annual handouts from the taxpayer, has to suffer the massive disadvantage of high electricity prices. The steel industry is being crucified partly because of electricity prices. Sir Walter Marshall, the chairman of BSC, has said that a 10 or 15 per cent. reduction in electricity prices could be made if the NCB obeyed the injunctions laid down in the statute that set it up.
The time has come for the rake's progress in the coal industry to stop. I have said that in various debates since I was first elected in June. It is stupendous that we should be asked month after month to add another £100 million here and another £200 million there to the NCB's losses and accumulated debts.
My hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) pointed out that the unfortunate


workers in the steel industry, who are being put out of work partly by Arthur Scargill and his like, cannot benefit from the sort of scheme proposed in the order. Nor can the workers of Associated Octel, in my constituency, who are being put out of work by the Government's mistaken decision to phase out the lead additives in petrol.
It is remarkable that a 49-year-old man with 33 years service in the coal industry can leave with the massive total of £36,480. All that the workers in my constituency will receive on redundancy is their entitlement under the Employment Protection (Consolidation) Act 1978 and whatever private industry can pay them out of the profits that they have earned over the years. They cannot be paid out of losses that have been accumulated and charged to the taxpayer.
I regard the order with mixed feelings. The coal mining industry has regarded the taxpayer as a soft touch for too long, and Conservative Governments have been the softest touch of all in many ways. The time has come to stop that. No one disagrees with the need to provide compensation for miners who are made compulsorily redundant—no one could say that the scheme is not generous—and the cant and hypocrisy that we have heard from Labour Members misrepresent the situation.
The coal industry can look forward to a secure future if we get it producing coal at prices that make it competitive on world markets. The jobs of miners will always be on the line while the NCB is turning in massive losses year after year and depending on handouts from the taxpayer to stay in business.
The massive misallocation of resources and squandering of the nation's resources that have occurred in the coal industry since nationalisation have drunk the oil from the North sea. The tax revenues from the North sea have been poured down the coal mines. The time has come for that to stop.
I call on the Government to think about this problem for the future, and not be such a soft touch the next time. We must get the coal industry back into proper order, and the Government must ignore the siren voices on both sides of the House that say that we can ignore these massive losses, which are a weight around the neck of profitable private industry.
While I shall not be dividing the House, I regard these orders with less than equanimity. My hon. Friend the Minister should recognise, unlike my hon. Friend the Member for Bury, North (Mr. Burt), that some Conservative Members are apprehensive about the difficulties that this will cause to the rest of British industry, from which our wealth is created. I speak for those workers in my constituency who have always worked for profitable industry and paid the taxes to fund the losses of the coal industry. They are now being made unemployed, and have the galling experience of seeing the coal miners gobble up extra redundancy payments as well. I send the message from my constituency to my two hon. Friends on the Front Bench that we shall not stand for this for ever.

1 am

Mr. Peter Hardy: Many of the speeches this evening have referred to Cortonwood colliery in my constituency. I do not have time to defend that pit or any other in south Yorkshire, although they could be defended

admirably against the rather shallow judgment of the hon. Member for Tatton (Mr. Hamilton). Suffice it to say that I have appealed to the NCB to take a more intelligent attitude about Cortonwood, particularly because of its central position in the current dispute.
I suggested to Mr. MacGregor that if he wished to make a sensible contribution at this difficult time — the Minister will recall that I gave warnings about this a fortnight ago—he should withdraw the improper and unconstitutional decision to close Cortonwood, and put its future back on the table for negotiations. I have not suggested that the NCB should go into a surrendering rout in the face of the NUM workers, but I have suggested that there should be tri-partite consideration. As the circumstances surrounding the closure of this pit are highly unsatisfactory and questionable—although I do not have time to present the evidence that the Minister knows that I can produce—I hope that the Minister will pass on some message to the NCB that will bring the future of the colliery back into question.
I welcome any improvement in early retirement terms, but if we are to ease the path of the contraction of the industry by extremely large payments to those under 50 while introducing such suspect proposals as those that we have had from Mr. MacGregor recently, there will not be any of the peace in the industry that hon. Members on both sides of the House would like to see achieved.

Mr. Orme: With the leave of the House, Mr. Deputy Speaker. My hon. Friend the Member for Wentworth (Mr. Hardy) has gone to the heart of the problem facing the mining industry. We heard the voice of the Institute of Directors, and that did not reflect the feeling of this debate, which has been a serious one about a serious issue. We want to see the end of the dispute as soon as possible, so the talking must start. We said to the Government that we want them to play a part in bringing the three sides together so that they can sit down and discuss the important issues.
We put it to the Conservative party that there are real alternatives, which are based on consultation, the shelving of the MacGregor proposals, and the ending of pit closures. Those are the proposals that I put forward to the Government. I hope that the Minister will address himself to those points, because they are central to the debate.

Mr. Giles Shaw: With the leave of the House I shall reply to the debate, which has ranged over three hours, and over a considerable number of aspects of the present position in the mining industry, together with the orders under debate. I wish to deal briefly with two or three points before I come to the points made by the hon. Member for Wentworth (Mr. Hardy) and the right hon. Member for Salford, East (Mr. Orme).
The right hon. Member for Barnsley, Central (Mr. Mason) called for a cessation of imports, and of opencast production. Imports are now roughly at their 1979 level, namely, 4 million tonnes of coal in short supply here, and this is in no way a significant contribution to demand in this country. I remind my hon. Friend the Member for Derbyshire, South (Mrs. Currie) that we are a net exporter of coal, and that has been a significant change in the last few years.
I understand that the negotiating machinery is under strain at present, a point to which the hon. Member for Midlothian (Mr. Eadie) referred.
On the key question of Cortonwood, to which the hon. Member for Wentworth referred, whatever views may have been expressed about that pit, and the announcement thereon, I assure the House that the board is prepared to re-convene the colliery review meeting before any further steps are taken in that regard. So far as I understand it, the NUM has not responded to that view.
In connection with the Bogside, which in the last debate on the subject was of great concern to the hon. Member for Midlothian, there was to have been a special consultative meeting with the unions on 13 March which would have considered the possibility of mining the Bogside reserves from elsewhere in the Longannet complex. As the hon. Gentleman knows, it was not possible for that to take place, because of the present problems. I want to reassure him that the importance of the review procedure is well understood, and the importance of retaining its viability and its acceptability is equally fully understood.
The question before the House is in part the redundancy payments, and in part the fact that the redundancy schemes are part of the re-structuring process. My hon. Friends have made it clear how concerned they are at the scale of the payments, and that there has not yet been a significant improvement in the performance of the board. It must be of great concern to hon. Members on both sides of the House that the improvement in productivity in recent years should be sustained and increased. All that the board seeks to do at present is to get a better balance between what the market will take and what the industry can produce, and to do it by reducing the least profitable parts of the industry's network.
I have to remind the House that the absolute amount required for 1984–85 is a reduction in total volume of some 4 million tonnes. This spreads across the areas, but there are some where there is an increase, not a reduction, and there are five areas where significant profits are being made. The largest single reduction out of the 4 million tonnes required is 1·4 million tonnes, coming from the north-east. The north-east takes the largest reduction of volume, yet in that area, as the area director has made clear, the changes that are required to achieve that reduction have largely already taken place, and have been announced, so that there is no further change to be made which is not already known, and accepted, within the north-east.
In south Yorkshire, as we know, Cortonwood, about which an announcement was made earlier this year, is the only single pit, as I understand it, that will be closed in relation to the achievement of the target so far announced for south Yorkshire. I beg the House to understand that

there is a wide spread of the reductions, but, equally, there are many areas in the board's twelve areas which have a satisfactory rate of prospect of increasing their profits and their volumes.
The intention is to provide an industry which can achieve financial viability, not just for the sake of reducing the public sector borrowing requirement, although that would be a sufficient reason, but because it would satisfy the consumer in terms of the price of fuel. That is why my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) was correct. Unless we can produce coal at a price at which the steel industry is prepared to buy, and with security of supply, we have no business whatever in viewing the coal industry with a view to investment.
We are determined to invest in the future of the industry, just as we are determined to invest in its restructuring so that it can be even more profitable than it has shown itself capable of being in certain areas in the past.

Mr. Lofthouse: The Minister said earlier that the order covered the continuity period for disabled mineworkers. The new clause that I withdrew during proceedings on the Coal Bill in 1983 concerned 37 miners who had been made redundant and lost out under the Contracts of Employment Act. Will they be compensated?

Mr. Shaw: I understand that they will be in relation to the ex gratia payments to which I referred in my opening remarks.
In the circumstances, the debate has been extremely good natured. I am appreciative of the way in which the House has handled the issues. I know how difficult it is for hon. Members coming from areas where there is genuine industrial difficulties. If the debate has achieved a single thread, it must be that there is great concern on both sides of the House that the industry should recover its poise to become a major producer of energy. It is part of the Government's intention that, by backing the industry with the financial provision that we have made, there can be no question of our commitment to the future viability of the industry. I beg the House to approve the order.

Mr. Dave Nellist: There are still some minutes left.

Mr. Deputy Speaker (Mr. Harold Walker): Order.

Question put and agreed to.

Resolved,
That the draft Mineworkers' Pension Scheme (Limit on Contributions) Order 1984, which was laid before this House on 7th March, be approved.

Resolved,
That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1984, which was laid before this House on 9th March, be approved.—[Mr. Giles Shaw.]

Orders of the Day — Dunblane Bypass

Motion made, That this House do now adjourn. —[Mr. Garel-Jones.]

Mr. Deputy Speaker: The Question is, That this House do now adjourn.

Mr. Dave Nellist: Get away.

Mr. Deputy Speaker: Order.

Mr. Nellist: What a coward.

Mr. Deputy Speaker: Order.

Mr. Nellist: Do not worry, I am going.

Mr. Michael Forsyth: I am grateful for the opportunity to raise the important question, to my constituents, of the Dunblane bypass. Improvements in the A9 have been under active consideration since before the war. Official reports since 1945 have argued for widening the road, providing dual carriageways or even building new alternative roads. The regional plan for central and south-east Scotland argued as long ago as 1948 for the new Edinburgh-Stirling road that, many years later, became reality in the form of the M9.
More recently, the 1970 report "Tayside: Potential for Development" recommended that the section from Blackford to Perth should be upgraded to dual carriageway. Unfortunately, throughout that period the interests of Dunblane appear to have been given little thought—if, indeed, they were given any thought at all. Situated just outside the Stirling county council boundary, Dunblane was not considered as a part of central and south-east Scotland. Neither was it regarded as a part of Tayside.
While other stretches of the A9 were considerably improved, other towns were bypassed and substantial stretches of road were replaced by motorway. Dunblane remains divided by a river and a railway, and by a major road with one fifth of the traffic using it in the category of heavy goods vehicle. It is a loss not only to Dunblane, but to Scotland. We can drive all the way by motorway and dual carriageway from London, and the first town to be reached will be Dunblane—it is also the last before reaching Inverness.
It has been recognised that something should be done about the problems of Dunblane. For 20 years it has been acknowledged that the position is unsatisfactory. I venture to remind my hon. Friend the Minister that my right hon. Friend the Secretary of State for Scotland, when he was a candidate in that part of the world, gave a strong commitment that the Dunblane bypass would be pursued with vigour.
Originally, it was intended to upgrade the road through Dunblane to dual carriageway status. Understandably, there were protests from the people who live in Dunblane. It was therefore agreed by the then Secretary of State, Lord Ross, that a bypass would eventually have to be provided. In 1972, the Conservative Government formally agreed that a bypass was needed. On 7 August 1972, the Scottish Office wrote to the clerk of the joint county council saying:
in principle, the improved trunk road should follow the line of a western bypass as favoured by your county council.

Unfortunately, 12 years later, not a sod has been turned, not a square inch of new tarmac laid. While other smaller communities on the A9 have been bypassed at Blackford and Auchterarder, Dunblane remains forlorn.
Not unnaturally, the people of Dunblane feel that they have been unfairly treated, and when one looks at the history of the project, it is easy to see why. When they succeeded in getting the bypass accepted as the solution, instead of upgrading the road through the town, they accepted that it would have to take its place in the list of priorities. Perth and Kinross joint county council undertook considerable work on the scheme, looking at a route to the west of the town, as well as — at the insistence of the Scottish development department — a route through the town. The latter route raised so many objections that it was abandoned by the Department, amidst a blaze of publicity. The council undertook a soil survey along the proposed western route, to determine broadly the soils involved and to highlight any potential problems. It also made an aerial survey.
Following the reorganisation of local government in 1975, Central region took over and made several efforts to persuade the Department to publish an order establishing the line of the bypass. Despite much support from my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn), who previously was the Member who represented Dunblane, no such action was forthcoming.
Instead, in 1977, Central regional council was asked to carry out a feasibility study of six or so alternative routes. The report of that study was submitted to the Department in September 1978. Despite persistent pressure, it took over two years before a site investigation was authorised by the Scottish Office, along the route that the council had identified as the best option, and which had been acknowledged as such by the Scottish Office in that letter of 1972.
The results of the investigation were submitted in May 1982. That was followed in August by slightly modified drawings of the council's preferred route. In November, the council's director of roads was informed that a further traffic study would be required, new design standards were to be introduced, and that a new computer programme had been introduced to evaluate road improvements. As a result, a completely new investigation was ordered covering the original routes, two new ones and—with the dogged persistence of which only civil servants seem capable — accompanied by a demand that the route through the middle of the town be investigated again. The results of that investigation have now been submitted to the Department.
My predecessor, the hon. and learned Member for Perth and Kinross, received a letter from my hon. Friend's predecessor in the Department, the hon. Member for Eastwood (Mr. Stewart), dated 18 April 1983, in which he said:
we must ensure that we get value for money from our investment in new roads. My Department's road engineers are therefore seeking, with due urgency, a solution to the problem at Dunblane which will yield an acceptable return. An up-to-date study of traffic in and around Dunblane is an essential first step in this assessment process and Central Region, as our agent authority, have made a start on this work. The study should be completed and the results assessed by the end of the summer, and we should then be in a position to determine the preferred line for the bypass and put the necessary statutory procedures in train.


That was the summer of 1983. It was in January 1984 that one of my constituents wrote to me, having received this reply, asking how long the summer of 1983 would be extended into the summer of 1984.
My hon. Friend was kind enough to reply to me on 17 February pointing out that the report prepared by Central regional council had been submitted to his Department and had identified several lines for a possible bypass. My hon. Friend said:
we must now determine which line performs best, taking account of environmental as well as economic factors. To this end my Department is about to appoint Messrs. Babtic, Shaw and Morton, Consulting Engineers, to carry out environmental assessments of the various lines proposed in the report and make recommendations. This work will take about 6 months, and thereafter we will be in a position to decide on a preferred line. I note what you say about local preference for a western line but you will appreciate that until the results of the economic, environmental and engineering appraisals have been coordinated and considered, I cannot comment on that aspect. I can assure you, however, that once a line has been chosen my Department will publish draft orders with all possible speed.
I am tempted to point out that when my hon. Friend the Member for Eastwood was Minister he seemed to be satisfied with the Central regional survey and was able to promise a possible line of route by the summer of last year. Yet we now have a further survey and a further promise for the summer of 1984, which I sincerely hope will be kept.
I asked my hon. Friend the Minister in a written question on 14 March if he could tell me when he expected to publish the draft order and how many route surveys had been carried out since the project was first mooted. In view of the history which I have just outlined I was surprised to receive the answer that publication of the draft order was planned for the early summer of 1985 and that two surveys only had been carried out since the need for a bypass was accepted in principle by the Secretary of State.
While delay has been the characteristic feature of the discussions concerning the Dunblane bypass almost every other improvement on the A9 has proceeded with some speed. North of Perth and south of Stirling the road has been transformed beyond recognition. Between Stirling and Perth every town except Dunblane has been bypassed. It is scarcely to be wondered at that the population of the town feels that it has been deliberately discriminated against because of its audacity in opposing the Department's original proposal to drive a dual carriageway through the town. Indeed, I receive constant correspondence, which I am delighted to pass on to my hon. Friend, from constituents who tell me of the problems that they experience in that they gather not flowers in their gardens but hub caps and bits of heavy vehicles.
I am grateful to have the opportunity to bring the case of the Dunblane bypass before the House tonight. The history of delay and indecision is one with which nobody can be happy and I hope that in his reply tonight my hon. Friend can promise that at long last progress is about to take place and that the community can look forward to a definite date from which it will no longer have to contend with the kind of traffic that every other town has now been spared.
In the interim, my hon. Friend may feel able to do something to redress the position, which has been exacerbated by his Department refusing to give the Central regional council the authority to extend the speed limits beyond the current boundaries of Dunblane to take account of the nearby school and the children who are walking into

the town, with all this heavy traffic travelling at speed. I particularly hope that he can guarantee, as his predecessors have done, that there is no question of the road going through the town being turned into a dual carriageway instead.
In Dunblane there is virtually unanimous support for the western route for a possible bypass. This was approved, as I said, by the Department back in 1972. According to my information, costings have been submitted to the Department showing that the eastern approach would be up to 50 per cent. more expensive, and the existing A9 route—which is out of the question—about 50 per cent. less. There is a further advantage in the western bypass route in that at a future date it would leave the Department with the option of bypassing Doune, thereby saving the cost of replacing the Scissors bridge over the Teith, which is considered to be substandard and would be a very expensive job indeed to carry out.
I also understand from my friends in the Central regional council that the western route has a positive rate of return. There would seem to have been some confusion in the answers that I have received on this matter. I am told that it scored a figure of nine, which though low, is apparently average by Scottish standards, and presumably rather higher than that scored by the Auchterarder bypass.
The Government have set out on a major programme of bypasses as compensation for their acceptance of the Armitage report, bringing heavier traffic on to our roads. The detrimental effects of heavy traffic on historic towns and places such as Dunblane are recognised. Is it too much to hope that a place can at last be found in the programme for this much delayed but much needed project?

The Under-Secretary of State for Scotland (Mr. Michael Ancram): I congratulate my hon. Friend the Member for Stirling (Mr. Forsyth) on securing this Adjournment debate and on raising a matter which I know is of considerable concern to him. I have been aware of that concern from the letters that he has written to me and the parliamentary questions that he has tabled. I appreciate that he speaks on behalf of his constituents when he talks of the anxiety that is felt over what has undoubtedly been a long time in the provision of a bypass. I am grateful for this opportunity to reply to the debate.
I must refer to the past because the perspective of the position in relation to this road depends greatly on what has gone before. I agree with my hon. Friend that the story effectively starts—although he referred to some earlier occasions—when the Conservative Government in 1972 accepted in principle that a bypass should be constructed to the west of Dunblane. Given the priority that was attached to other schemes in the overall reconstruction of the A9 and elsewhere in the trunk road system, an early start the Dunblane bypass was not indicated at that time.
While the existing A9 trunk road passes through Dunblane, it skirts the town centre and, in terms of traffic delay and environmental effects, it causes less disruption than, for example, the A9 through Perth or other roads such as the Al through Musselburgh and Tranent. It was, therefore, right for the Government to take the view that the more pressing cases should be tackled first.
The Government have, since 1972, and they remain, committed to the construction of a Dunblane bypass, and I use the word "bypass" advisedly. Now that the work has started on the bypass at Perth, I accept that there is a very


strong case for carrying out the Dunblane scheme, which is the last major bypass on the A9, at the earliest opportunity.
The original proposal before 1972, as my hon. Friend pointed out, had been to construct a new road through the town, and by then about £4 million had already been spent on the construction of the dual carriageway up to Fourways roundabout. The existence of the dual carriageway meant that Dunblane did not present a major bottleneck for trunk road A9 traffic compared with other towns on the route. In fact, the trunk road through Dunblane coped fairly well with the traffic at that time, and — following the introduction of a local traffic management scheme in the mid-1970s — it still, to an extent, continues to do so. For that reason, a low priority was given to the scheme at that time.
My hon. Friend mentioned the bypass at Auchterarder and Aberuthven, which not so long ago I had the honour to open. I am sure that my hon. Friend recognises that those communities bypassed had a great need to be bypassed, as the A9 ran through them, indeed along the fronts of shops. In many ways, that was a more disruptive and, some might say, more dangerous condition than can be argued for Dunblane. For that reason, the Government, in assessing the priorities, decided that such communities should have priority for any bypasses. Therefore, the Dunblane bypass has taken more time than was envisaged when the principle was first accepted.
My hon. Friend talked about the western line bypass, and rightly pointed out that the Government have not been prepared to adopt that line. In 1972 the Secretary of State made a commitment to construct a bypass to the west of Dunblane, as proposed by Perth and Kinross county council in 1968 in its proposed amendments to the combined county development plan. In June 1977, the central regional council, as my hon. Friend said, was invited by the Scottish development department to undertake a feasibility study into the bypass. The regional council's report was submitted to my Department in March 1979, and examined four possible routes—two to the east, and two to the west of the town. One of the western routes was recommended by the regional council in that report.
The more sophisticated economic evaluation methods, which had not then been introduced into the Department's appraisal procedures—the so-called network evaluation from surveys and assignments, colloquially known as NESA— showed that the western line proposed by the regional council produced a negative result that was not acceptable in investment terms.
My hon. Friend mentioned that a positive result had been achieved in the assessment made by the regional council. In the evaluation made by that method by my Department, the result was negative, and that fact was made known to my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) in correspondence between him and my predecessor in the office I now hold. That negative result was not acceptable in investment terms, and I am sure that my hon. Friend agrees that it is essential to obtain the best possible investment of public funds. The information available until recently showed that the Dunblane bypass would not have been a sound investment. The money could have brought better returns

elsewhere. I am sure that my hon. Friend appreciates that it was important that those priorities where a better return was available should be dealt with first.
My hon. Friend mentioned the fact that in 1983 the Government asked the regional council, as their agent, to conduct a traffic survey, because once the western line, recommended by the regional council in 1979, was found to be unacceptable, alternative solutions in terms of line and design had to be sought. An essential first step in that assessment process was an up-to-date study of traffic in and around Dunblane. The regional council was asked in April 1983 to undertake the traffic study and to report in September of that year. In fact, the report was not submitted to the Department until the end of January 1984.
The council's study report which was submitted to my Department in 1979 identified various possible alternative lines for a bypass. We now have available an up-to-date study of traffic in and around Dunblane. The Government must now determine which of those alternative lines is best in economic, environmental and engineering terms. For that reason, consulting engineers have been appointed to make a detailed assessment of the various possible lines identified in the previous surveys.
When the work was being put out, I thought that it would take about six months to complete, but it is now my view that if it is to be done properly it will take about a year to complete. This is not a delaying tactic. In the course of making the assessment after so much time has passed, I am trying to ensure that all the information and accuracy possible in such assessments is achieved. No environmental assessment of alternative lines has yet been carried out, nor has there been a detailed study of ground commissions that would enable the relative costs of the different routes to be compared properly. In considering the routes, it is important that we have the necessary information so that a proper decision can be taken at the end of the day on that basis.
The consulting engineers will have to satisfy themselves about the results of the earlier feasibility studies before they can make recommendations on the line and the design of a bypass which they may eventually be called upon to defend at a public local inquiry. I must stress that point to my hon. Friend, who knows as well as I do the difficulties that can be occasioned by inquiries of that sort if the evidence that is submitted by those who are trying to sustain it is not as full, complete and sustainable as it should be.
My hon. Friend asked about the general timing of the report. I have said that it will take about a year to complete. It is my hope that the consulting engineers will be in a position to report to me in about a year's time. Depending upon the force and the strength of the recommendations that they make, I would hope to be in a position to select a preferred line and to publish draft orders as quickly as possible after that in the early summer of 1985. My hon. Friend may feel that this is an undue time, but after all the time that has passed it is essential that the line that is chosen is properly assessed and that we are satisfied that the economic return on the investment is there in terms of the criteria that we work by, and that once the line is decided it is the most likely to be able to survive the rigours of the sort of public inquiry that might follow upon it.
My hon. Friend asked two specific questions. First, he asked about the speed limit, an issue which he has raised previously with my Department. The Queen Victoria


school and the central region have asked my right hon. Friend the Secretary of State, as the trunk road authority, to reduce the present 60 mph speed limit to 30 mph on the road that runs past the school. My Department's response was that such a change could not be agreed entirely, but the present 30 mph limit is to be extended northwards by about 200m so that the south entrance to the school falls within it. A necessary order for that extension is being prepared.
In addition, my Department has instructed that solid double white lines are to be painted upon the length of road fronting the school to prevent overtaking. "Slow" carriageway signs are to be painted on the road in two positions between the end of the dual carriageway and the B8033 junction. Extra school warning signs are to be erected. The submission that was made by both the school and the region was carefully considered, but the view was taken that the road beyond the 200m which I have mentioned was of a type that would mean that a speed limit of 30 mph was unlikely to be observed. It is a general rule in assessing such submissions that speed limits should not be imposed where the likelihood is that they will not be adhered to by road users. I hope that my hon. Friend will accept that what is being done will do something to reduce the fears of both the school and the community about that stretch of road.
My hon. Friend asked about the route through the centre of the town. When I said earlier that the principle of a bypass had been accepted, I used the word"

advisedly". It is my intention that the solution that will be reached will be a bypassing one. I hope that he will accept that assurance in the manner in which it is intended.
I appreciate that the present route through the town presents problems for local inhabitants. The single carriageway section north of the Fourways roundabout is also a delaying factor for trunk road traffic. The Government will do everything possible to achieve an early start. Much will depend upon the public reaction to the draft orders when they are published in the summer of next year, and on the resources available.
If the assessments are carried out thoroughly so that firm and positive lines can be identified, and the environmental impact and other studies are successful, we shall achieve a faster conclusion than might otherwise be achieved.
It would be wrong for me to forecast a starting date for construction because we must await the outcome of the draft orders. However, I appreciate my hon. Friend's anxiety. I too wish to have a bypass for Dunblane—for the people who live there and for those who travel on the A9. It is an important construction which must be undertaken as soon as is practicable. But to rush procedures would not necessarily lead to the best solution. For the local community and for those who use the load, it is better to hasten slowly.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Two o'clock.